HORIBA, Ltd.

Financial Information

March, 2017

© 2017 HORIBA, Ltd. All rights reserved.

1

Contents
 2016 Results 2017 Forecast
 Business Segment Outline
 Shareholder Return MLMAP2020 [2016-2020] Progress Financial Data Corporate profile[Disclaimer]
Plans and forecasts in this presentation that do not constitute historical facts are predictions concerning future businessresults. Thesestatements are based on judgments made in accordance with information available at the present time.
All rights reserved. Reproduction in whole or part of this presentation without permission is prohibited.
Copies of this presentation and additional information are available at HORIBA’s website: http://www.horiba.com© 2017 HORIBA, Ltd. All rights reserved.

2

Contents
 2016 Results 2017 Forecast
 Business Segment Outline
 Shareholder Return MLMAP2020 [2016-2020] Progress Financial Data Corporate profile© 2017 HORIBA, Ltd. All rights reserved.

3

Review of 2016
 Earthquakes in Kumamoto
External  Exhaust gas and fuel economy testing problems
events  Appreciation of the yen Brexit
 Revenue recognition policy change (January):
Shipment base  Delivery/installation base HORIBA MIRA full-year results in HORIBA’s
consolidated results included for the first time HORIBA BIWAKO E-HARBOR began operation
Internal Expansion of HORIBA STEC’s Aso Factory decided
events  HORIBA India Technical Center was established Reorganization of HORIBA Group companies inFrance decided (effective January 2017)
 Water measuring businesses integrated to HORIBA
Advanced Techno Ltd. (from January 2017)© 2017 HORIBA, Ltd. All rights reserved.

4

Summary of 2016 Results
Paid the highest dividend amount (85 yen per share)
Achieved ROE of 10%
 Year-on-year declines from the top line down to ordinary profit, but theabsolute levels were the second highest to the record-highs in 2015

P&L

B/S

 Record-high net profit due to a one-time drop in tax rate* Negative impact of yen appreciation: Revenues down 14.2bn yen; OP
down 3.1bn yen Total assets were 239.6bn yen, down 7.5bn yen from the end of
2015, due to lower yen value caused by the yen appreciation
 Equity ratio: 55.4％

 Operating CF: Inflow of 15.8bn yen, due to growth in profit

CF Investing CF: Outflow of 10.4bn yen, due to capital spending

FCF+5.4bnyen

 Financial CF: Outflow of 0.4bn yen, due to long-term borrowing* 2015 results are restated numbers. Net profit in 2016 was the second highest compared with the restated figures.
© 2017 HORIBA, Ltd. All rights reserved.

5

2016 full year results(Billions of yen)

2016

2015
Results

Forecast(New Policy ※)(as of Nov.2016)

Results

vs.2015

vs.
Forecast

Sales

171.9

170.0

170.0

-1.1% +0.1%

Operatign Profit

20.1

17.5

18.4

-8.2% +5.7%

O.P %

11.7%

10.3%

10.9%

Ordinary profit

19.6

17.0

18.2

-6.9% +7.5%

Net Income attributeable to
Owners of Parent

13.2

10.8

12.9

-2.4% +20.0%

315
10.7%

256
8.5%

308

-2.4% +20.0%

Net prof it
per share(Y en)

ROE

10.0%

-0.8p

-0.7p

+0.6p

+1.5p

※2015 results are restated numbers. The same shall apply hereinafter© 2017 HORIBA, Ltd. All rights reserved.

6

2016 Results by Segment(Billions of yen)

Sales
2016

2015
:Record-highResults※(New Policy )Forecast

Operating profit
vs.

Results2015(as of Nov . 2016)

2016

2015
Results※(New Policy )Forecast

vs.

Results2015(as of Nov . 2016)

Auto

65.4

64.0

62.2

-4.9%

5.2

3.5

3.5

-32.1%

P&E

16.7

16.5

16.7

+0.3%

1.7

1.5

1.5

-12.3%

Medical

27.6

26.5

26.5

-4.0%

2.5

2.7

2.8

+9.7%

Semi

35.3

37.0

38.8

+9.8%

9.4

9.0

9.6

+2.6%

Scientific

26.7

26.0

25.7

-3.8%

1.1

0.8

0.9

-21.1%

171.9 170.0

170.0

-1.1%

20.1

17.5

18.4

-8.2%

Total

※2015 results are restated numbers. The same shall apply hereinafter© 2017 HORIBA, Ltd. All rights reserved.

7

Contents
 2016 Results 2017 Forecast
 Business Segment Outline

 Shareholder Return MLMAP2020 [2016-2020] Progress Financial Data Corporate profile© 2017 HORIBA, Ltd. All rights reserved.

8

2017 Market outlook
Auto・ Expect steady R&D investments by automakers
・ Closely monitor emission regulations in EU and Japan

P&E

・ Expect firm demand for stack gas analyzers andwater measurement equipment in Asian countries

Medical・ Closely monitor sales trend of small-sized products in Japan・ Changes in medical care system in US

Semi

・ Expect continuous investment by semiconductor manufacturers
in the first half, uncertainties over outlook in demand by
semiconductor production equipment in the second half

Scientific・ Japan: Expect an increase in the private sector capital spending.
・ Overseas: Closely monitor government budgets and spending in EU© 2017 HORIBA, Ltd. All rights reserved.

9

Exchange rate forecast for 2017
(Yen)

2015

2016

Results

Results

2017
Forecast

vs 2016USD

121.10108.78

110

+1.22

EUR

134.31120.26

120

-0.26

GBP

185.19147.57130-17.57

1 yen O.P. sensitivity for 2017 Forecast

USD
EUR© 2017 HORIBA, Ltd. All rights reserved.

155 million yen
23 million yen
10Forecast for 2017
(Billions of yen)

2015
Results:Record-high(New policy ※)2016
Results

2017
Forecast

vs 2016

+4.1%

18.4

177.0
20.0

11.7%

10.9%

11.3%

+0.4p

Ordinary proft

19.6

18.2

+5.6%

Net income attribute to
Owners of Parent

13.2

12.9

19.3
13.0

Net profit
per share(Yen)

31.5

30.8

+0.3%

10.7%

10.0%

30.9
9.5%

Sales

171.9

170.0

Operating profit

20.1

O.P %

ROE

+8.1%

+0.3%

-0.5p

※2015 results are restated numbers. The same shall apply hereinafter© 2017 HORIBA, Ltd. All rights reserved.

11

Forecast for 2017 by segment(Billions of yen)

Sales
:Record-high

2016

2017

O.P
vs 2016

2016

2017

vs 2016

Auto

62.2

67.0

+7.7%

3.5

5.2

+47.3%

P&E

16.7

18.0

+7.4%

1.5

1.6

+3.9%

Medical

26.5

25.0

-5.9%

2.8

2.2

-21.6%

Semi

38.8

41.0

+5.6%

9.6

10.0

+3.3%

Scientific

25.7

26.0

+1.0%

0.9

1.0

+5.8%

Total

170.0

177.0

+4.1%

18.4

20.0

+8.1%

© 2017 HORIBA, Ltd. All rights reserved.

12

Contents
 2016 Results 2017 Forecast
 Business Segment Outline

 Shareholder Return MLMAP2020 [2016-2020] Progress Financial Data Corporate profile© 2017 HORIBA, Ltd. All rights reserved.

13

Next Slide© 2017 HORIBA, Ltd. All rights reserved.

14

Auto

2016 Results and 2017 Forecast

2016 Results(Billions of yen)

Topics of Automotive Industries in 2016

EMS* ＋ Steady sales in Japan, increase in OBS*  The autonomous-driving car age begins.

 Use of artificial intelligence (AI) Accelerated EV development
 R&D shift to electrification
 Exhaust gas and fuel economy test scandals at
VW and in Japan.
 More strict regulations in EMS (WLTP, RDE*)
 For indoor tests and on-road tests
 Brexit

MCT - Temporary decline in demand
ECT* Full-year incremental sales; goodwill- of 0.4bn yen
2017 Forecast

EMS ＋ Steady sales in Japan and Asia
MCT ＋ Significant recovery; improved profitability EMS: Emission Measurement Systems
OBS: On-Board Exhaust Emission Measurement System
ECT ＋ Many inquiries; weak GBP to depress
ECT: Engineering Consultancy & Testing business operated by- amounts in yen

Sales and O.P.

HORIBA MIRA
WLTP, RDE: See details on Slide 17

Sales

O.P.

54.2

7.2

37.1

1.8
2008

2009

© 2017 HORIBA, Ltd. All rights reserved.

35.7

1.6
2010

38.6

2.8
2011

43.2

4.4
2012

49.5

4.2

55.0

64.2

65.4

4.4

5.2

5.8

2013
2014
2015
Previous accounting policy

2015

62.2

3.5
2016
New policy

67.0

5.2

2017 (Forecast)
15

Strategy for
improving profitability

Auto

Aim at cutting the lead time to one-third- HORIBA BIWAKO E-HARBOR- MCT
MCT business improves profitability

Shorten the lead time in the specification-design stage Significant recovery is expected in 2017
Collection

Inspection

Test

Installment

Product

ProcureDesignDetermine
Specification

Inquiry

Case of the MEXA series middle-sized EMS product

14.5

18.0

16.2
13.2

8.1

60

The lead time was shortened to 1/5

40

11days in Aug. 2010

30

9.5

20
10

© 2017 HORIBA, Ltd. All rights reserved.

19.7

BacklogSales
11.6

60 days in Aug. 2015

0Aug.2015

Focus on improving profitability

MCT Sales and Order Backlog (Billions of yen)

Lead time from specification adoption to design completion50

 Improve order booking by expanding turnkey projects (in Japan, EU, the US) Tighter management of project progress[Problem] Long waiting in thedesign process[Solution] Reduce design workby standardizing specs(days)
70

 Pick up in automakers’ investments

11.0

12.8

13.3

10.8

15.2

2011 2012 2013 2014 2015 2016 2017
(Restated)Feb.2016

Aug.2016(Forecast)16

Regulatory trend in EMS (Emission Measurement System)
and Operations in an emerging Market

Auto

EMS Sales and Order Backlog (Billions of yen)

Regulatory trend

45

Solid sales in Japan (automakers, parts makers)
Steady investment in Japan30
WLTP*(unified emission regulations by the UN)
Start in Sep. 2017 in EU and in 2018 in Japan 15
RDE (Real Driving Emission: on-road test) regulation
0
Start in Sep. 2017 in EU※WLTP…Worldwide harmonized Light vehicles Test Procedure

HORIBA India Technical Center Establishment

37.4

39.8 40.1 40.0

33.3
26.5

28.6

Backlog13.7 16.9 17.9 20.2 26.9 29.4

2011 2012 2013 2014 2015 2016 2017
(Restated)

Overview :HORIBA India Technical center

Open: November, 2016
Location: Pune, western India

Sales(Forecast)

Mr. Hiramatsu,
the Japan Ambassador to India
and Mr. Devendra Fadnavis,
governor of Maharashtra,
attended opening ceremony(Center of Automotive Business)

Function: Indoor Automotive test
Product customization/Training
Objective: Strengthen demonstration test
and application development© 2017 HORIBA, Ltd. All rights reserved.

Data sharing in real time

HORIBA BIWAKO E-HARBOR “E-LAB central control room”

17

Auto

ECT (HORIBA MIRA) Business
ECT Sales and Backlog (Billions of Yen)ECT Business (Engineering/HORIBA MIRA)
8

7.2

7.0

 Sale decline caused by weaker GBP vs. the JPY
6
4.5
Backlog
Sales
 Investments of 3.0bn yen planned each in 20164
and 2017 while closely monitoring the Brexit
2
4.2
3.5
impacts
0
2015
2016
2017
 Increased inquiries to MIRA Technology Park
(Half-year, Restated)(Forecast) Accelerated global business (Japan/Asia)
JPY/GBP
185 yen
147 yen
130 yenParticipation in the UK government
autonomous driving car project

Participated in Jaguar Land Rover’s testing;contributed to the demonstration test of
autonomous driving technology

http://www.ukautodrive.com/
the-uk-autodrive-project/© 2017 HORIBA, Ltd. All rights reserved.

G7 transport ministers’ summit(held in Karuizawa, Japan, in Sep. 2016)

George Gillespie, CEO of HORIBA MIRA,
participated as a representative of U.K.
Main theme  Autonomous driving
1. Development and dissemination of cutting-edge
technology regarding automobiles and roads
2. Basic policy for transportation infrastructure

Major participants
Germany: BMW
France: Renault
Japan: Toyota
UK: HORIBA MIRA
18

P&E

2016 Results and 2017 Forecast

2016 Results

Sales by region• Steady sales of stack gas analyzers in Japan＋• Robust process analytical measurement business (U.S.)＋•- Weak sales in EU and Asia

2017 Forecast• Expect steady sales to continue in Japan
＋

20.0
15.0

2.0

10.0

2.9
0.7
1.9

5.0

9.0

• Profitability improvement in gas measurement business＋in HORIBA BIWAKO E-HARBOR

1.0
2008

Sales

12.0

11.7

14.5

0.2

0.8

2.5

2009

2010

2011

3.0
0.9
2.1

America
China

10.0

2016

Asia

2017 (Forecast)

O.P.

13.7

14.7

1.6

1.2

2012

2013

16.4

16.7

16.7

16.7

18.0

2.0

1.7

1.7

1.5

1.8

2014

2015

2015

2016

2017 (Forecast)Previous policy© 2017 HORIBA, Ltd. All rights reserved.

Europe0.0•- Increase R&D expenditure for water business

13.7

2.0

Japan

＋

Sales and O.P.

18.0

16.7

New policy

19

P&E Analysis technology for the environment
Gas

Water

Automatic on-line analysis of PM components

Project to improve water quality of wastewaterfrom dyeing factories
 Installing wastewater treatment systems andwater quality monitors in Myanmar
 Joint project with Hitachi Zosen Corporation

 Integrate HORIBA’s technology in SCI and P&E
× Identify sources of origin of microparticles
 Enable 24-hour consecutive analysis of elements

Water quality analyzer
PM2.5 analyzer
Demo facility installed in
HORIBA BIWAKO E-HARBOR

Facilities installed in Wundwin city, Myanmar

Ministry of Environment (MOE) plans to adopt
HORIBA’s products
 Scheduled to install devices at 4 sites in Japanin Apr. 2017

Designated one of the “Model businesses toimprove water environment in Asia” by MOE
 Started experimentation in Jan. 2017

© 2017 HORIBA, Ltd. All rights reserved.

20

Medical 2016 Results and 2017 Forecast
2016 Results

Sales by region＋ Firm sales of CBC+CRP analyzers in Japan
-

30.0

26.5

25.0

Sales decrease in yen due to the yen appreciation＋ Steady growth in India

8.7

6.5

Expect firm sales of CBC+CRP analyzers in Japan• Accelerated sales expansion by introducing a new＋Sales and O.P.

10.0

America
China

1.2
3.6

5.5
1.3
3.5

5.8

6.0

Japan

2016

2017 (Forecast)

Asia

0.0

brand in overseas markets
Sales

O.P.

26.8

27.0

27.4

27.6

26.5

25.0

2.4

2.4

1.7

2.4

2.5

2.8

2.2

2012

2013

2014

2015

2015

2016

2017 (Forecast)

24.7

22.3

22.5

23.4

22.4

2.3

3.1

0.6

1.9

2008

2009

2010

2011

Previous policy© 2017 HORIBA, Ltd. All rights reserved.

Europe9.2

20.0

2017 Forecast＋(Billions of yen)

New policy

21Medical Growth with New Brand and Service
New brand “Yumizen”
 Brand building in the IVD market

 Strategy to expand sales in medium/largesized hematology analyzers
 Propose total solutions, including a data
management system
 Expand business globally from 2Q of 2017

Provide maintenance service systemusing IoT technology
for reducing device downtime
 Enhance maintenance support bycontinuous monitoring & diagnostic reports
 Detect problems in advance and provide
appropriate suggestions
 Target: 6,000 contracts by 2020 in Japan
Also plan to expand globally
MedicalCertificate

Customer
Monitoring
ServerAutomatic Data
Collection

携帯通信網使用
Through Mobile network

Preventive
MaintenanceMonitoring
MachineCondition

Coordination
Call Center© 2017 HORIBA, Ltd. All rights reserved.

Distributors
22

Semi 2016 Results and 2017 Forecast
2016 Results• Record-high sales and operating profit due to＋increased investments by semiconductor
manufacturers in Asia•- Sales decrease in yen terms due to theappreciation of the yen

2017 Forecast• Investment to raise Aso factory production＋
capacity- Less-certain market outlook for the 2nd half＋
- Closely monitor investment trend in China
Sales and O.P

Sales

27.6
16.7

24.6

1.2

12.4
-0.0

6.3

4.9

2008

2009

2010

2011

Topics regarding the semiconductor
industry and mass flow controller market
 Data centers’ shift to memory for storage Sharp increase in demand forsemiconductors
 Changes in manufacturing technology
Miniaturization, 3D-NAND, double-patterning→ Increase in demand for etching devices
 Disciplined investment by semiconductor
manufacturers
 The silicon cycle to fluctuate less widely The market to stabilize

O.P.

17.8
2.2
2012

24.1

28.9

4.8

6.4

2013

2014

35.3

35.3

38.8

9.4

9.4

9.6

2015

2015

2016

Previous policy© 2017 HORIBA, Ltd. All rights reserved.

(Billions of yen)

New policy

41.0
10.0
2017 (Forecast)
23

Semi

Aso Factory’s capacity expansion andthe market share in mass flow controllers

Investment for capacity expansion
Current

HORIBA STEC’s Aso Factory capacity expansion
Amount:2.7bn yenCompletion: Nov. 2017 (Plan)
Target:Increase in production capacity formass flow controllers(1.5 times larger space)
The first company to invest in capacity expansion in
Kumamoto Prefecture after the earthquakes

Extended area

Global market share for mass flow controllers
70%

Global market share2016: 57%

60%
50%
40%

2010 2011 2012 2013 2014 2015 2016
© 2017 HORIBA, Ltd. All rights reserved.

[HORIBA’s strengths]
Technical point Established a stable supply system of mass
flow controllers with embedded cutting-edge“differential pressure sensors”
Supply system Stable production realized by HORIBA’s
balanced management portfolio
24

Scientific2016 Results and 2017 Forecast

2016 Results•＋-

Sales by region

Firm sales to the private sector and weak sales
to academia in Japan30•- Weak sales to academia in all regions＋ Increased sales of Raman Spectroscopy in China＋• More applications for the private sector in Japan

10＋•- Closely monitor China’s economy• New product release through integrating＋
technologies within HORIBA Group
Sales and O.P.

20.5

20.8

22.0

1.2

1.1

1.4

2009

2010

0.8
2008

Sales

© 2017 HORIBA, Ltd. All rights reserved.

2011

25.7

26.0

5.5

5.6

6.5

6.7

3.4
2.6

3.4
2.8

7.5

7.5

2016

2017 (Forecast)20

2017 Forecast

24.8(Billions of yen)

EuropeAmerica
China
Asia
Japan

0

O.P.

20.4

22.9

0.9

0.9

2012

2013

25.6

27.0

1.2

1.3

2014

2015

Previous policy

26.7
1.1
2015

25.7

26.0

0.9

1.0

2016

2017 (Forecast)

New policy

25

Scientific Exploit new markets using HORIBA technology
Cutting-edge technology of HORIBA and HORIBA Jobin Yvon
Close relationship with academia
HORIBAHORIBA Jobin Yvon
Electron beam technology of Topcon

New product by integrating
HORIBA Group’s technologies

Imaging CL* device (released in Aug. 2016)
 Convert defective images into high-accuracy images
 Characteristic distribution analysis of phosphor parts of LED
elements
 Accelerate R&D for the next-generation power devices* Imaging Cathodoluminescence (CL)

New market creation and product development to meet customer’s needs
For a rare metal
manufacturer
 Software development forrare metal analysis
 Customized chamber
MESA-50T© 2017 HORIBA, Ltd. All rights reserved.

Materials for semiconductors, Life science sector
 Specialized in defectcharacterization
 Applied Topcon technology

SEM-CL Collaboration with Raman Testing for protein anddrugs

INV-XploRA

Cutting-edge material
development
 High concentration cell
 Minute amountmeasurement

LA-96026

Contents
 2016 Results 2017 Forecast
 Business Segment Outline

 Shareholder Return MLMAP2020 [2016-2020] Progress Financial Data Corporate profile© 2017 HORIBA, Ltd. All rights reserved.

27

Shareholder Return
Dividends and Share buybacks● 2015 Results 70 yen per share +● 2016 Results 85 yen per share● 2017 Forecast 90 yen per share
57%

60%

2015 Share buyback
218,400 shares,
about 1.0 billion yen

Per-share dividend (from 2002 to 2017 Forecast)50%
Per share dividend(yen)40%

An Average total return ratioof last 3years ：29.2％

44%

Total return(%)

29%

30%

17%

20%

18%

17%

17%

14.5

02'3

03'3

10
04'3

39

27%

31%

28%

9%

Record high for 7 years in a row

17

40

10%
8.5

28%

29%

20%

19%

15%
0%

(Yen)

44

13

50

60

67

70

85

90

100
90
80
70
60
50
40
30
20
10
0

16

28

26

05'3

06'3

06'12 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017（fore）

Basic policy (since 2013)- Dividend payment + Share buyback = 30% of Consolidated net profit to be targeted- Remaining earnings are retained internally for strategic investment (i.e., facilities, M&A)
© 2017 HORIBA, Ltd. All rights reserved.

28

Contents
 2016 Results 2017 Forecast
 Business Segment Outline

 Shareholder Return MLMAP2020 [2016-2020] Progress Financial Data Corporate profile© 2017 HORIBA, Ltd. All rights reserved.

29

20-year business results(Billions of yen)

Continual growth in Sales and in all profits
Doubled in 10 years from 2010
Sales

Net profit

O.P.

250.0
30.0
171.9 170.0 177.0
144.2

85.0
74.4 78.5

5.4
2.5
0.7

6.8

2.0

92.4

9.3

03'3

04'3

116.0 16.5

11.2 11.7

104.5

10.9

118.5 123.4 117.6

12.2

14.9

17.2

3.5

8.6
6.4

05'3

6.5

6.0

20.1
18.4

20.0

11.7
13.2 12.9 13.0

7.9 8.6

7.3

8.9

10.5

3.1

06'3 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
(Restated)

2001-2005© 2017 HORIBA, Ltd. All rights reserved.

20.0

13.7

5.1

-1.0
02'3

105.6

153.0
138.1

134.2

2006-20102011-2015(Forecast)

2020(plan)

2016-202030

Major policies

MLMAP2020 “ONE STEP AHEAD”●Applying HORIBA Technology in new businessfields and new markets and becoming a true
partner in analysis and measurement●Accelerating corporate growth by its Super
Dream Team based on balanced management,
matrix organization, and HORIBA Stained
Glass Project●Improving capital efficiency to maximize
corporate value© 2017 HORIBA, Ltd. All rights reserved.

31

Actions for achieving MLMAP2020 targets
1. Re-organize the water measuring business toaccelerate growth
2. “Stained Glass Project” activities
3. Improvement in asset efficiency and maximizing
corporate value Introduction of original KPIs to measure asset efficiency
 Establishment of financial subsidiaries© 2017 HORIBA, Ltd. All rights reserved.

32

Water

Accelerate growth in water measuring business
Integrate water measuring resources to
HORIBA Advanced Techno Ltd. (Kyoto)

Integrate products and technology from all HORIBA affiliates and3 segments(Scientific/P&E/Semi) in all function including R&D, production, sales
 Create the value only HORIBA can realize
Doubled sales in water measuring business

10bn yen  20bn yen(Billions of yen)

11.5

12.0

 Cover all water treatment processes Timely and precisely satisfy market demand Create water measurement network using IoT

20.0

13.2

10.0

P&E
Water quality analyzer
Semi

ChemicalConcentration Monitor■ P&E■ Semi■ Scientific
2015

2016

(Previous
Accounting policy)© 2017 HORIBA, Ltd. All rights reserved.

Sci
pH meter

6.0
4.0

2017

2020

(Forecast)(Plan)
33

Water

Water measuring and analysis
business domain

Water measuring/analysis business domain: Life Cycle of Water
Water supply Industrial
infrastructure waterIndustrial processes

Industrial
Sewagesewage infrastructure

Products
Tap water
R&D

Production

Quality

Regulations ondischarged water

Semiconductor
Petrochemical
Pharmaceutical
Water-intake

EnergyRecycling

Discharge

Medical

Water in nature (rivers, lakes, underground water)© 2017 HORIBA, Ltd. All rights reserved.

34

Water

Water measuring and analysis
business domain
Scientific (University/pH)

Semi (Chemical Concentration Monitor)

Water supply Industrial
infrastructure waterIndustrial processes

P&E (Regulation & Process)Products

Industrial
Sewagesewage infrastructure

Tap water
R&D

Production

Quality

Drainage
restriction

Semiconductor
Petrochemical
Pharmaceutical
Water-intake

EnergyRecycling

Discharge

Medical

Water in nature (rivers, lakes, underground water)© 2017 HORIBA, Ltd. All rights reserved.

35

Selected as one of New Diversity Management
Selection 100 (by the Ministry of Economy, Trade and Industry of Japan)

Mr. Saito, executive vice president, and
Ms. Moriguchi, leader of Stained Glass
Project at the award-receiving ceremony.

Reasons for the award:
Corporate motto “Joy and Fun” and the Stained Glass Project

HORIBA Stained Glass Project Lunch gatherings of working mothers Seminars on how to balance long-term care and work Workshop to improve work productivity© 2017 HORIBA, Ltd. All rights reserved.

36

Enhance asset efficiency and maximize corporate value

Decided to introduce a new KPI to measure asset efficiency
 Indicator composed of “Operating profit” and “WACC”
 Applying unit: Business segments and Group companies Strengthen PDCA cycle: Efficient use of business assets and increase profit

 Plan to prepare a budget to this project in 2018
Improve asset efficiency&
Accelerate business growth

Investment

Cash
Generation

Business
GrowthFounded financial subsidiaries in the US and the UK Improve capital efficiency through group financing
 Strengthen financial management function in each region© 2017 HORIBA, Ltd. All rights reserved.

37

Symbol of MLMAP2020

ONE STEP AHEAD - To create a next stage of HORIBA Step out of the existing business fields and pursue further expansion.
Take a new perspective and overcome technological/market/organization barriers.
Be flexible, think outside the box, and move up to the next stage.
© 2017 HORIBA, Ltd. All rights reserved.

38

Contents
 2016 Results 2017 Forecast
 Business Segment Outline

 Shareholder Return MLMAP2020 [2016-2020] Progress Financial Data Corporate profile© 2017 HORIBA, Ltd. All rights reserved.

39

Trend of Market capitalization(Billions of yen)

262BJPY
in Feb. 2017

216BJPY
in Oct. 2007
52BJPYin Dec. 2008

Jan-2007

Jan-2008© 2017 HORIBA, Ltd. All rights reserved.

Jan-2009

Jan-2010

Jan-2011

Jan-2012

Jan-2013

Jan-2014

Jan-2015

Jan-2016

Jan-2017
40

Changed the accounting policy for revenue recognition
2014(Original)(New)

Not installed
Not arrived

2015

2016

Not installed
Not arrived

Installed
Delivered

Installed
Delivered

Changed points:

Original Shipment baseNew
The date of delivery or installation based on contractual
arrangements
Applied timing:
January 2016
Reason for change: Triggered by the introduction of a new ERP implementation, toharmonize with international accounting standards.
© 2017 HORIBA, Ltd. All rights reserved.

As of February 10, 2016, audit procedures for this change has not finished yet

41

Operating profit analysis ( vs. 2015 )(Millions of Yen)

2015

2016

Results※

Results

20,142

Exchange
Increase Increase
impactSales
for Gross
Cost ofamount goods sales
profitExchange
impact for
Expenses

R&D cost
increase+12,426+3,484

Other
expenses
increase-1,231-1,574-8,071

Sales impact /+4,354
Decrease sales cost ratio-6,675

Exchange impact-3,191

18,499

Expenses impact-2,806

Decrease of Operating profit -1,642※2015 results are restated numbers. The same shall apply hereinafter(same in following slide)© 2017 HORIBA, Ltd. All rights reserved.

42

Consolidated Cash Flows(Millions of Yen)

2015

2016

Cash flows from operating activities

14,77015,871

1,101

Cash flows from investing activities-30,642-10,427

20,214

Cash flows from financing activities

12,843-451-13,294

Cash and cash equivalents at endof year47,85951,9404,081

Free cash flows-15,872

5,443

21,315© 2017 HORIBA, Ltd. All rights reserved.

Variation

43

Capital Investment, Depreciation, R&D(Billions of yen)

2015
Results

Forecast
＠11/7

Results vs 2015

14.8
1.4
16.3
6.1
12.3
(7%)

15.3
0.7
16.0
6.5
13.0
(8%)

13.4 -10%
0.3 -75%
13.7 -15%
6.8 +12%
12.9
+5%
(8%)

PP&E
Intangibles
Capital Investment
Depreciation
R&D(To net sales)

2016
Topics2017
Topics

2016

2017
vs
Forecast

-12%
-49%
-14%
+5%
-1%

Forecast vs 2016

14.6
+9%
0.4 +11%
15.0
+9%
7.2
+6%
14.0
+8%
(8%)

・PP&E
・Depreciation
・R&D

Investment to MIRA(3.0BJYP)
Goodwill of MIRA※(0.4BJYP), Biwako factory (0.7BJYP)
Increased in Automotive Test System Business・ PP&E・ Depreciation

Investment to MIRA(3.0BJYP), Expansion of Aso Factory(2.7BJYP)

Goodwill of MIRA※(0.4BJYP) , Increase in MIRA and
Test center invested in 2016

・ R&D

Increase in Auto and P&E Business※Good will of MIRA e.g. … Amortization included© 2017 HORIBA, Ltd. All rights reserved.

44

Cash Balance(Billions of yen)(Consolidated basis, each end of the year)

Total Loan Balance

28.0

24.1
Cash*1
51.1

Cash*1
49.2
Bonds
15.0
Long 2.5
Short 6.6

2013
269%
60%

*1

Cash
47.8
Bonds
15.0

46.7

44.7

Bonds
15.0
Long

16.8

Cash*1
51.9

Bonds
15.0
Long
19.2

Long 2.2

Short
10.8

2014
254%
60%

Bond
redemption
in 2020
Borrowedfrom JBIC*2
15.1bn yen(2015)

Short
12.8

2015
229%
55%

Short
12.4

2016
237%
55%

Current ratio
Capital ratio

・Conclusion of liquidation of receivable contract with 2 banks.
・Recent issuer rating : R&I [A-] (July 2016), JCR [A] (August 2016)*1 Cash*…Cash and Cash Equivalents at End of Period. *2 JBIC: Japan Bank for International Cooperation© 2017 HORIBA, Ltd. All rights reserved.

45

Contents
 2016 Results 2017 Forecast
 Business Segment Outline

 Shareholder Return MLMAP2020 [2016-2020]Progress Financial Data Corporate profile© 2017 HORIBA, Ltd. All rights reserved.

46

Corporate Profile






Head office
Kyoto, JapanFounded1945
Incorporated
1953
CEO
Atsushi Horiba
Fiscal year end December 31

Atsushi Horiba
Chairman, President & CEO- Corporate motto -To have interest and pridein our work to enjoy our lives© 2017 HORIBA, Ltd. All rights reserved.

47

Business Segments
Automotive Test Systems
Emission Measurement Systems (EMS)
Mechatronics Devices (MCT)
Driving Control Systems (ITS)Engineering Consultancy & Testing (ECT)

Process & Environmental
Environmental Systems
Environmental Radiation Monitor
Environmental Regulation & Process Business

Medical
In-Vitro Diagnostic (IVD) Systems
Integration of HORIBA ABX’s
Technology & Marketing Know-How

Semiconductor
Mass Flow Controller
In-situ Analysis
Synergy among HORIBA HQ, HORIBA STEC
and HORIBA Jobin Yvon’s Technologies

Scientific
Synergy of HORIBA and
HORIBA Jobin Yvon’s Technologies
Raman, Grating, and Fluorescence© 2017 HORIBA, Ltd. All rights reserved.

48

Well Balanced Business Operation -Five Business SegmentsAutomotive Test Systems

Sales 170.0 Billions of Yen(FY2016)

Process & Environmental

Scientific

25.7
(15%)

Automotive

62.2
(36%)

Medical

Semiconductor

38.8
(23%)

Semiconductor

Medical P&E

26.5 16.7
(10%)
(16%)

Scientific

Business Composition of Sales(Billions of Yen)

© 2017 HORIBA, Ltd. All rights reserved.

49

Market Shares
GlobalDomestic

Emission Measurement Systems

Automatic Blood Cell
Counter plus CRP

80%

Mass Flow Controllers

57%

Stack Gas Analyzers

20%

Raman Spectrophotometers

30%

100%

Gratings

35%※Market shares quoted are estimates by HORIBA.
© 2017 HORIBA, Ltd. All rights reserved.

50

HORIBA Worldwide
Sales of FY2016: 170.0 BJPY

Geographic Composition of Sales(2016)
EU

23%

The Number of Group Companies by region
Japan

33%

Americas
18% Asia26%© 2017 HORIBA, Ltd. All rights reserved.

(As of December 31, 2016)

America
Europe
Asia
Total

9
23
17 (4 in Japan, including HORIBA, Ltd.)
49
51

Employees by Region
Other Americas
3%

Other Europe
2%

Japan
38%

UK
11%

Total Asia: 53%

3,761
Total Europe: 34%

2,442France13%© 2017 HORIBA, Ltd. All rights reserved.

(As2015年12月31日現在
of December 31, 2016)

7,149

USA
10%
Germany
8%

Total Numberof Employees
従業員数

Other Asia
15%

Total Americas: 13%

946
52

© 2017 HORIBA, Ltd. All rights reserved.

53

Thank you감사합니다Cảm ơnありがとうございましたDziękuję

धन्यवाद
Merci

Grazie谢谢ขอบคุณครับ

நன்ற

ObrigadoΣας ευχαριστούμε

Tack ska ni haБольшое спасибо

Danke© 2017 HORIBA, Ltd. All rights reserved.

Gracias54