Morgan Stanley MUFG Kyoto Trip 2018
Masao Okawa
Managing Director
HORIBA, Ltd.
June 14-15, 2018
© 2018 HORIBA, Ltd. All rights reserved.

1

Contents
2017 Results
2018 Forecast
Business Segments Outline
Shareholder ReturnOther Topics
Financial Data
Corporate profile© 2018 HORIBA, Ltd. All rights reserved.

2

Contents
2017 Results
2018 Forecast
Business Segments Outline
Shareholder ReturnOther Topics
Financial Data
Corporate profile© 2018 HORIBA, Ltd. All rights reserved.

3

Review of 2017
 Start of the Trump administration in US UK’s announcement to leave EU ⇨ General election in UK
External  Presidential election in France, general election in Germany
Events  Booming semiconductor market⇨ Innovation such as IoT, AI, and autonomous vehicle operation
 Automotive electrification, emission regulations
 New/expanded facilities (US, UK, South Korea, etc.)
 Completion of the Aso factory expansion
Internal  Partnership in the Medical segment
Events  Announcement of a transition to a new management regime
 Renewed a record-high share price; market cap exceeds 330bn yen© 2018 HORIBA, Ltd. All rights reserved.

4

Summary of 2017 Results
Renewed record-highs in sales, profit and dividend; 11.5% ROE

P&L

Increase in sales and profit in the Automotive Test Systems and Semiconductor
segments
Total assets were 265.9bn yen, up 26.2bn yen from the end of 2016, due to capitalspending

B/S

Interest-bearing debt was 42.0bn yen, down 4.6bn yen from the end of 2016, due tousing the capability of financial subsidiaries in US and UK
Equity ratio 56.5%
Operating CF : Cash in 28.2bn yen due to growth in profit

CFInvesting CF : Cash out 13.1bn yen due to capital spending

Free CF+15.1bn yen

Financial CF : Cash out 9.0bn yen due to short-term debt repayment© 2018 HORIBA, Ltd. All rights reserved.

5

2017 Results(Billions of Yen)

2016
： Record-highResults

2017

Forecast(as of Dec. 19, 2017)

Results

vs.
2016

vs.
Forecast

+25.3

+3.3

24.5

195.3
26.8

+8.3

+2.3

10.9%

12.8%

13.7%

+2.8p

+1.0p

Ordinary Profit

18.2

23.5

+8.3

+3.1

Net Income attributable to
Owners of Parent

12.9

15.0

26.6
16.2

+3.3

+1.2

USD / JPY

108.78120.26111.00127.00112.16126.70

+3.38

+1.16

+6.44

-0.30

Sales

170.0

192.0

Operating Profit

18.4

O. P. %EUR / JPY
© 2018 HORIBA, Ltd. All rights reserved.

6

2017 Results by Segment(Billions of Yen)

Sales
2017

2016

： Record-highResults

Operating profit

Forecast(as ofDec. 19, 2017)

Results

2017

2016
vs.
2016

vs.
Forecast

Results

Forecast(as ofDec. 19, 2017)

Results

vs.
2016

vs.
Forecast

Auto

62.2

72.0

73.3 +11.1

+1.3

3.5

6.7

7.6

+4.1

+0.9

P&E

16.7

17.0

17.4

+0.6

+0.4

1.5

0.6

1.0

-0.4

+0.4

Medical

26.5

25.0

25.1

-1.3

+0.1

2.8

1.7

1.9

-0.8

+0.2

Semi

38.8

52.0

53.3 +14.4

+1.3

9.6

15.0

15.6

+5.9

+0.6

Scientific

25.7

26.0

26.1

+0.3

+0.1

0.9

0.5

0.4

-0.4

-0.0

Total

170.0

192.0

195.3 +25.3

+3.3

18.4

24.5

26.8

+8.3

+2.3

© 2018 HORIBA, Ltd. All rights reserved.

7

Contents
2017 Results
2018 Forecast
Business Segments Outline
Shareholder ReturnOther Topics
Financial Data
Corporate profile© 2018 HORIBA, Ltd. All rights reserved.

8

Market Assumptions for 2018
Auto

Strong willingness to invest by the global automotive sector due to tighter emission
regulations in Japan & Asia and innovation for electrification & autonomous driving

P&E

Recovery in investment by the oil industry due to higher oil prices
Tighter environmental regulations in developing countries

MedicalJapan: Favorable sales to doctors in private practiceOverseas: Increase in demand for blood testing equipment in developing countries

Semi

Continuous strong investment by semiconductor manufacturers
Expect growth in demand for power semiconductors, due to vehicle electrification

Scientific© 2018 HORIBA, Ltd. All rights reserved.

Stable demand for optical components from the semiconductor market
Accelerating research on new materials due to the booming secondary battery
and semiconductor markets
9Exchange rate
(Yen)

2018

2016

2017

Results

Results

USD

108.78112.16

110

110

-2.16

EUR

120.26126.70

130

130

+3.30

Forecast

Forecast(as of Feb. 13)(as of May 9)

vs 2017

1 yen O.P. sensitivity for 2018 Forecast (Yen appreciation)
USD 0.21 billion yen
EUR 0.02 billion yen© 2018 HORIBA, Ltd. All rights reserved.

10

2018 Forecast(Billions of Yen)

： Record-high

2016

2017

Results

Results

2018
Forecast

Forecast(as of Feb. 13)(as of May 9)

vs. 2017

Sales

170.0

195.3

210.0

218.0

+22.6

Operating profit

18.4

26.8

29.0

34.0

+7.1

O.P. %

10.9%

13.7%

13.8%

15.6%

+1.9p

Ordinary profit

18.2

26.6

28.4

33.4

+6.7

Net Income attribute to
Owners of Parent

12.9

16.2

19.0

22.5

+6.2

Net profit per share (Yen)

307
10.0%

386
11.5%

450

533

+147

12.1%

14.3%

+2.8%

ROE
© 2018 HORIBA, Ltd. All rights reserved.

11

2018 Forecast by Segment(Billions of Yen)

Sales
2017
： Record-highResults

O.P.

2018
Forecast

Forecast(as of Feb. 13)(as of May 9)

vs.
2017

2017
Results

2018
Forecast

Forecast(as of Feb. 13)(as of May 9)

vs.
2017

Auto

73.3

79.0

79.0

+5.6

7.6

8.0

8.0

+0.3

P&E

17.4

19.0

19.0

+1.5

1.0

1.4

1.4

+0.3

Medical

25.1

26.0

26.0

+0.8

1.9

2.0

2.0

+0.0

Semi

53.3

58.0

66.0 +12.6

15.6

17.0

22.0

+6.3

Scientific

26.1

28.0

28.0

+1.8

0.4

0.6

0.6

+0.1

Total

195.3

210.0

218.0 +22.6

26.8

29.0

34.0

+7.1

© 2018 HORIBA, Ltd. All rights reserved.

12

Contents
2017 Results
2018 Forecast
Business Segments Outline
Shareholder ReturnOther Topics
Financial Data
Corporate profile© 2018 HORIBA, Ltd. All rights reserved.

13

NEXT Slide© 2018 HORIBA, Ltd. All rights reserved.

14

Auto

2017 Results and 2018 Forecast(Billions of yen)2017 Results
＋

EMS

*1

＜Auto Sales Breakdown＞

Sales increase due to tighter emission regulations＋

MCT*2 Recovery in capital spending by automakers＋-

ECT*3 Increase in expenses to form a MIRA Japan teamAggressive investment for next-generation
regulations and technologies

65.4
4.2
1.6
19.7

62.2
7.2
1.6
13.2

79.0

73.3
8.0
1.6
18.3

10.5
1.5
18.0

ECT
ITS *4MCT
EMS
排ガス*1 Emission Measurement Systems; *2 Mechatronics; *3 Engineering Consultancy & Testing

39.7

40.1

45.3

49.0

2015

2016

2017

2018(Fore.)

2018 Forecast＋ EMS Solid demand in Europe under new regulations*4 Intelligent Transport Systems

Sales and O.P. (Full-year)
Sales
O.P.
Increase in demand in China and India ahead of
new regulations
73.3 79.0
65.4
62.2＋ MCT Similar trend as in 2017. Automakers: likely to
55.0
49.5
8.0
7.6
37.1 35.7 38.6 43.2
increase new R&D facility construction in 2019-2020
5.8 5.2
4.4 4.2
1.8 1.6
3.5
2.8＋ ECT Increase in orders based on next-gen technologies
2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

(Fore.)© 2018 HORIBA, Ltd. All rights reserved.

15

The next-generation emission regulations
EVs generating activity

Auto(Billions of yen)

Status of next-gen emission regulations
Regulation
WLTP1
RDE2

EU
Sep. 2017

Japan
Oct. 2018(Plan)
2022(Plan)

Activity derived from EVs
Test systems
Provide solutions from single systems(powertrain, motor)
to comprehensive systems, incl. vehicle evaluation
E-Motor testing equipment

Electric vehicle testing

China, India: New regulation from 2020(Plan)(Same level as Euro6)
1 Worldwide harmonized Light vehicles Test Procedure(Unified emission regulations by the UN)
2 Real Driving Emission (On-board emission regulation)<EMS Sales/ Backlog>
受注残Backlog

28.6

売上高
Sales

33.3

37.4

39.8

40.1
29.4
2016

16.9

17.9

20.2

26.9

2012

2013

2014

2015

© 2018 HORIBA, Ltd. All rights reserved.

45.3

49.0

37.5

2017

Battery development
Battery development and analysis
 Development and testing of battery
packs and battery management
systems (HORIBA MIRA)
Analysis byscientific products Analysis and evaluation of li-ion
and all-solid-state batteries(use of scientific technology)
2018(Fore.)Business expansion by mutual utilization of resources
16

Auto

Establishment of battery development facility
for electrified vehicles

Introduction of advanced evaluation concept to connect Real and Virtual
Battery development facility for electrified vehicles(HORIBA BIWAKO E-HARBOR) Enable powertrain and vehicle testing with battery
and fuel cell connection across test cells
 Provide battery testing with various environmental
condition
 Operation start Jul. 2019 / Investment 1.3bn yen

Advanced Battery Development Suite(ABDS)(HORIBA MIRA Limited)(Overview of ABDS)© 2018 HORIBA, Ltd. All rights reserved.

(Inside of ABDS)

Expand HORIBA
MIRA’s engineering
capability globally

17

Auto

Contributing to R&D for
autonomous driving vehicles
Business in UK

Participate in the UK government project Autonomous driving “UK Autodrive”
 Host demonstration experiment
Main members of “UK Autodrive”※UK Autodrive Consortium members
http://www.ukautodrive.com/consortium-members/

New order booked from the UK government
Establish a facility for multi-purpose tests
such as communication, crash, and vehicle
Rendering of the test facility
turning.

© 2018 HORIBA, Ltd. All rights reserved.

Action for business globalization
Event at the British Embassy Tokyo
 Automakers and UK government VIPs attended
 HORIBA presented potential for EV & autonomousvehicle business.
Accompanied UK Prime Minister May’s visit to China
 Dr. George Gillespie, CEO of HORIBA MIRA
accompanied the prime minister, as arepresentative of the UK automotive industry.

Accelerate business globalization
Event at the British Embassy Tokyo(2nd from right: UK Ambassador
to Japan, Paul Madden)

Prime Minister May’s visit to China

18

P&E

2017 Results and 2018 Forecast(Billions of yen)

<Sales by Business>

2017 Results＋ Stack gas analyzers

Japan: Replacement demand
China: Demand increase, driven by
VOC regulation

16.7
1.2
1.5
2.4

Slow sales in the process measurement equipment
business in US due to less investment by the oil industry

2018 Forecast＋ Capture domestic replacement demand and anticipate-

further demand for stack gas analyzers related to VOC
regulation in China＋ Sales increase for process measurement equipment
business due to recovery in investment by the oil industry＋ Capture domestic replacement demand for watermeasurement systems
Sales increase in developing countries© 2018 HORIBA, Ltd. All rights reserved.

16.7
1.1
1.9
2.1

17.4
1.4
0.9
2.5

19.0
1.3
1.9
2.7

Other
Process

6.4

Air
pollution
Water
Stack Gas
Analyzer

5.3

5.4

5.9

6.0

6.1

6.4

6.7

2015

2016

2017

2018
(Fore.)

Sales and O.P. (Full-year)

12.0 11.7
0.2
2009

0.8
2010

14.5 13.7 14.7
2.5
2011

1.6

1.2

2012

2013

Sales

O.P.
16.4 16.7 16.7 17.4 19.0

2.0
2014

1.7 1.5
1.0 1.4
2015

2016

2017

2018

(Fore.)
19

P&E

Business expansion in emerging markets
Gas

Water

Launch new products in developing countries

Sales increase by coping with local regulations(Tunable Laser Hydrogen Chloride Analyzer “TX-100”)

Feature: No need of periodic replacement of parts;
Easy calibration → Reduce running andmaintenance cost
Plan: Sale to incineration plants

Enhancement of local engineering (India, China)
Customize stack gas analyzer to local specification
TX-100 (adopted at an
incineration plant in China）

S. Korea Wastewater regulation change→ Quickly modified and authorized

India  Authorized under local industrial standard Increase in the number of distributors
for expanding sales channels
Water quality analyzers applied in the sewerage process of plants

Local customization in India
Korea

India

【Sewerage plants】© 2018 HORIBA, Ltd. All rights reserved.

20

Medical 2017 Results and 2018 Forecast(Billions of yen)2017 Results
Increase in expense in promoting hematology
and CRP analyzers in Japan- Sales drop in South America＋ Increase in expense for US FDA approval andsales promotion of new products＋-

New testing
systems

Solution(Launch in 2017)

Rendering of installed products
in a customer’s lab. in Brazil

2018 Forecast-

Intensified competition in hematology and
CRP analyzers in Japan

Sales increase by new products launch and＋ increase in expense for US FDA approval andsales promotion of new products© 2018 HORIBA, Ltd. All rights reserved.

Sales and O.P. (Full-year)
22.3 22.5 23.4 22.4
1.9 2.3
2009

2010

3.1

2011

O.P.

26.8 27.0 27.6 26.5 25.1 26.0

2.4 2.4
2012

Sales

2013

1.7
2014

2.5 2.82015

2016

1.9 2.020172018(Fore.)
21

Medical Initiatives for business expansion
Long-term agreement with Siemens Healthineers
Contract signed: Oct. 2017
Contents: Supply middle-large hematology analyzer to
Siemens, which provides total healthcare solutions
including inspection equipment, diagnostic
imaging unit, and care system
Aiming at sales growth, together with HORIBA Yumizen brand<Business development by test category>
Test Category

ClinicalChemistry

Hematology

Immunology

Coagulation

Market size

2tn yen350bn yen

2tn yen200bn yen

Hospitals

Large hospitals
Testing centers
Small andmedium-sized
hospitals

Private practioners
Hospital units andsurgery rooms (POCT)© 2018 HORIBA, Ltd. All rights reserved.

C.C.

Mid./Small
CRP
Hematology

New product “Yumizen H630CRP”
with combined technologyof Japan and France

 5 Diff. white cell diagnosis(France)+CRP(Japan)
 For private practice andSmall- to mid-sized hospitals
 Coordinate with software “GATE LINK”
compliant with electric medical chartsMid./SmallCoag.

New productYumizen H630CRP

Exhibition(Launch in Nov. 2017)22

2017 Results and 2018 Forecast

Semi(Billions of yen)2017 Results

MFC-related topics in Semi. market＋ Record-high sales and O.P.
＋

Record-high production volume in
Mass Flow Controllers (MFC)

2018 Forecast
Robust capital spending by＋semiconductor makers in 1st half of year
Increased production capacity of the＋
expanded Aso factory
Sales and O.P. (Full-year)

Sales

O.P.
53.3

35.3
28.9
24.1

38.8

6.4 9.4

9.6

0.0

6.3

17.8
2.2 4.8
4.9

2009

2010

2011

2014

2016

12.4

27.6 24.6

2012© 2018 HORIBA, Ltd. All rights reserved.

2013

2015

66.0
22.0

15.6
2017

2018

(Fore.)

Increase in storage for data centers
Increase throughput of Big Data
related to AI and IoT
Increased use of semicons in automobiles

Highdemand for
semi.

Change in semiconductor technology(Miniaturization, 3D-NAND, Multi-layered)Highdemand for
etchingHigh demand for mass flow controllers

HORIBA’s strength in high-end etching
Installed PI(Pressure Insensitive) functionthat enables highly accurate fuel control
against pressure fluctuation Pressure Insensitive MFC
CRITERION D500
23

Semi

Establish a stable delivery system
Enhance sales and service capabilities

Completed expansion of Aso factory

Enhance global sales and service bases

Expansion to satisfy further increase in demand
Timely delivery of high-quality products

Korea: new head office of HORIBA STEC KOREA, Ltd.
 Started in Apr. 2017
 Increased production capacity and number of engineers

Investment: About 2.7bn yen / Completed: Dec. 2017
Objective: Increase production capacity of MFCs
(50% increase in floor space)
Status: Achieved record-high production in Mar. 2018.

Taiwan: new head office of HORIBA Taiwan, Inc.
 Started in Sep. 2017
 Added one clean room, the second

China: new service offices in Wuhan and Nanjing
Provide technical service to nearby customers
Expansion area

Expansion in Aso factory

HORIBA STEC KOREA’s new office Opening ceremony of HORIBA Taiwan

HORIBA’s global MFC market share: About 60% (as of Dec. 2017; estimate: HORIBA)© 2018 HORIBA, Ltd. All rights reserved.

24

Scientific 2017 Results and 2018 Forecast(Billions of yen)

Diffraction gratings

2017 Results-

Sluggish sales to universities in Japan, US and EU⇔ ＋ Strong sales in China＋-

Increase in R&D expenses for new products＋

US sales up of spectroscopes for semicon makers

2018 Forecast

 Core component of
optical products Global state of the art technology
 Developed and produced by
HORIBA France S.A.S. (former
HORIBA Jobin Yvon S.A.S.)
entered into HORIBA Gr. in 1997
HORIBA France S.A.S.
Europe Research Center (France)＋ Firm sales of core components for optical products＋ Recovery in demand from universities in Japan, US and EU＋ New market development with products customized toSales and O.P. (Full-year)

Sales

O.P.

25.6
22.9
22.0
20.8
20.5
20.4

26.7 25.7 26.1 28.0

needs of each customer
1.2 1.1 1.4

0.9

0.9

1.2 1.1
0.9

0.4

2009

2012

2013

2014

2017

2010

2011

2015

2016

0.6
2018

(Fore.)© 2018 HORIBA, Ltd. All rights reserved.

25

New product launch in new markets
Scientific
Initiatives taken in growth markets
New product “DUETTA”
for the Bio-Life science market
 Fluorescence and absorbance spectrometer For R&D of antibody treatment drugs
 Combined the technology of former Photon
Technology International (US) acquired in2014 and former HORIBA Jobin Yvon US

Use of a speed detector toenable quick measurement© 2018 HORIBA, Ltd. All rights reserved.

New software with
Improved user interface

Raman spectrometer: Expand businessin China and apply new technology
Raman/Fluorescence Technology Symposium
Participated by 80 scientists
in materials, energy, chemical,
other fields(Held in Dun Huang, China, in Aug. 2017）

Toray Research Center developed a new analysis
method by using HORIBA’s technology
 Integrated current Raman microscopewith AFM (Atomic Force Microscope) Enabled a nano-level analysis
Valid for structural analysis
AFM(Atomic Forceof power semiconductors
Microscope)Raman
26

Contents
2017 Results
2018 Forecast
Business Segments Outline
Shareholder ReturnOther Topics
Financial Data
Corporate profile© 2018 HORIBA, Ltd. All rights reserved.

27

Shareholder Return
Basic policy- 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)

Dividends per share and Share buybacks
InterimYear-end

2016 Results
85 yen[30 yen, 55 yen]2017 Results 116 yen[40 yen, 76 yen]2018 Forecast 120 yen[50 yen, 70 yen]

Per-share dividend (from 2008
to 2018 Forecast
Renewed record-highs in
dividend in 7 years (Fore.)
(Yen)

44

40

50

60

116 120

85
67 70

13 17
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

An average total return ratio of last 3 years : 29.5%© 2018 HORIBA, Ltd. All rights reserved.

(Fore.)

28

Contents
2017 Results
2018 Forecast
Business Segments Outline
Shareholder ReturnOther Topics
Financial Data
Corporate profile© 2018 HORIBA, Ltd. All rights reserved.

29

Change in Representative Directors
Name
Atsushi Horiba
Juichi Saito
Dr. Masayuki Adachi
Takashi Nagano

New title from Jan.1, 2018
Chairman & Group CEO
Executive Vice Chairman & Group COO
President & COO
Director & Board Leader of GLOBAL ATS BOARD

Previous title
Chairman, President & CEO
Executive Vice President
Senior Managing Director
Director & General Manager

Purpose behind the change in roles of new organaization
Strengthening group management and clarifying the group management system,
to further enhance HORIBA’s technology and development capabilities

At the press conference,
Kyoto, Oct. 24, 2017

Future roles
Horiba Strengthen governance, promote the corporate culture, and supervise
the entire group
Saito
Manage the group and lead specific strategies
Adachi Focus on managing HORIBA, Ltd. and strengthen its function as theglobal headquarters of HORIBA Group
Nagano Focus on the ATS segment, accelerate its global business expansion© 2018 HORIBA, Ltd. All rights reserved.

30

Initiatives for workstyle innovation matching the workfront“Stained Glass Project” initiatives
STEP １
2014

STEP 2
from2015

STEP 3from2017

Start from promoting women’s
empowerment

Reviews of activities in 2017

“KAERU” Meeting
34 meetings(340 participants)
Get off early.
Start Workstyle Innovation workshop
Theme: ”Individuals are changemakers”
Change work practices.
Identified “efficiency
Change myself.
of meetings” asConnect management, HR Department,
and workfront
Realizing flexible workstyles common issue
Make best of characteristics of each
worksite and organization

Key actions in 2018
 Raise efficiency of meetings: Create optimal
operating methods for corporate-wide use Study introduction of rules to achieve flexible
workstyles considering the workfront© 2018 HORIBA, Ltd. All rights reserved.

 A company-wide survey of opinions offrontline workers
 Support for work and family care balance“KAERU” Meeting

Work and family care seminar

31

“HORIBA Premium Value” introduction
Adopt a budget for a unique KPI to measurecapital efficiency

Approach by each division“Capital cost” is deducted from “Operating profit”

HORIBA Premium Value
Operating Profit

Capital Cost

Invested capital×
Internal capital
cost ratioPenetrate the concept to group companies with a simple calculation method
Focus the operating profit which business divisions monitoring on a daily operations
Evaluate in absolute numbers, to easily understand effects and targets in monetary terms© 2018 HORIBA, Ltd. All rights reserved.

32

Contents
2017 Results
2018 Forecast
Business Segments Outline
Shareholder ReturnOther Topics
Financial Data
Corporate profile© 2018 HORIBA, Ltd. All rights reserved.

33

Trend of Market capitalization(Billions of yen)

407BJPY
on May 14th 2018
(Record-high)132BJPY
in Jan. 2008
52BJPYin Dec. 2008

Jan-2008

Jan-2009© 2018 HORIBA, Ltd. All rights reserved.

Jan-2010

Jan-2011

Jan-2012

Jan-2013

Jan-2014

Jan-2015

Jan-2016

Jan-2017

Jan-2018

34

Operating profit Analysis (vs 2016)(Billions of Yen)

2016

2017

Jan. – Dec.

18.49

Jan. – Dec.

Increase
Sales

Increase
Cost of
Goods
sales

Exchange
Impact for
Gross profit

Exchange
Impact for
Expenses

Increase
R&D cost

Increase
Other
expenses+21.13

-9.85

+2.25

-0.94

-0.80

-3.44

26.83

Increase+11.28 Exchange impact +1.30 Expenses impact -4.25
Gross profit

Increase of Operating profit +8.33© 2018 HORIBA, Ltd. All rights reserved.

35

Impact of Fluctuation in Foreign exchange
Exchange rate impact (2017 Results)
Sales +4.17bn yen O.P. +1.30bn yen
Operating profit

Sales
Total

USD

EUR

Total

USD

EUR

Auto

+1.26 +0.32 +0.96+0.18 +0.05 +0.10

P&E+0.29 +0.08 +0.10+0.09 +0.00 +0.04

Medical+0.79 +0.15 +0.51+0.03 +0.19 -0.06

Semi+1.06 +0.70 +0.02+0.88 +0.58 +0.01

Scientific+0.75 +0.30 +0.41+0.10 +0.03 +0.05

Total+4.17 +1.57 +2.01+1.30 +0.70 +0.15

2016 Jan. - Dec.
2017 Jan. - Dec.
2018 Jan. - Dec. (Fore.)© 2018 HORIBA, Ltd. All rights reserved.

(Billions of Yen)

Exchange rate impact
for 2018 Forecast
1 yen impact of Sales and O.P.
(Yen appreciation)

Sales
USD -0.53bn yen
EUR -0.33bn yen

Operating profit
USD -0.21bn yen
EUR -0.02bn yen

USD : 108.78 yen, EUR : 120.26 yen
USD : 112.16 yen, EUR : 126.70 yen
USD : 110.00 yen, EUR : 130.00 yen
36Capital Investment, Depreciation, R&D
Results

Forecast@12/19

13.7

15.0

6.8

7.2

12.9
7.6%

Capital Investment

Depreciation
R&D(To net sales)

2017
Topics2018
Topics

2018

2017

2016

Results(Billions of Yen)

vs
2016

vs
Forecast

-2.1

-3.4

+0.7

+0.3

14.0

11.6
7.5
13.9

+1.0

7.4%

7.1%

-0.5%

Forecast

vs
2017

+4.4

-0.1

16.0
7.5
15.5

-0.3%

7.4%

+0.3%

+0.0
+1.6

-PP&E
-Depreciation-R&D

Expansion of Aso factory(2.3 bn yen), Investment to MIRA (1.3 bn yen)

-PP&E
-Depreciation

Expansion of Aso factory(1.7 bn yen), Investment to global network
Decrease Goodwill of MIRA +Increase by new investment
and expansion of Aso factory (0.1 bn yen)

-R&D

Increase in Auto and Semi Business

Goodwill of MIRA※(0.4 bn yen)
Increased in P&E business※Good will of MIRA e.g...Amortization included© 2018 HORIBA, Ltd. All rights reserved.

37

Consolidated Cash Flows(Billions of Yen)

2017

2016

Variation

Cash flows from operating activities+28.28+15.87+12.41

Cash flows from investing activities-13.16-10.42-2.73

Cash flows from financing activities

-9.04

-0.45

-8.59

Cash and cash equivalents at end of year

+58.33+51.94+6.39

Free cash flows+15.12

+5.44

+9.67

© 2018 HORIBA, Ltd. All rights reserved.

38

Cash Balance
Total Loan Balance
28.0(Billions of Yen)

46.7

44.7

42.0
Bonds
15.0

Bonds
15.0
Cash※
51.1

Bonds
15.0
Long 2.2

Short
10.8

2014
254％
60％

Cash※
47.8

(Consolidated basis, each end of year)

Long
16,8
Short
12.8

2015
242％
56％

Cash※
51.9

Long
19,2

Short
12.4

2016
237％
55％

Bonds
15.0
Cash※
58.3

Long
18,7

Bond
redemption
In 2020
Borrowedfrom JBIC
15.1 bn yen(2015)

Short 8.3

2017
239％
57％

Current ratio
Capital ratio- Loan repayment due to group financing- Recent issuer rating : R&I “A-” (July 2017), JCR “A” (August 2017)*1 Cash*…Cash and Cash Equivalents at End of Period. *2 JBIC: Japan Bank for International Cooperation© 2018 HORIBA, Ltd. All rights reserved.

39

Contents
2017 Results
2018 Forecast
Business Segments Outline
Shareholder ReturnOther Topics
Financial Data
Corporate profile© 2018 HORIBA, Ltd. All rights reserved.

40

Corporate Profile
Head Office
Foundation
Incorporation
Fiscal Year End

Kyoto, Japan
1945
1953
December 31- Corporate motto -Atsushi Horiba
Chairman & Group CEO
To have interest and pridein our work to enjoy our lives© 2018 HORIBA, Ltd. All rights reserved.

41

Business Segments
Automotive Test Systems

Process & Environmental

Medical

Semiconductor

Scientific© 2018 HORIBA, Ltd. All rights reserved.

・Emission Measurement Systems
・Test Automation Systems
・Intelligent Transport Systems
・Engineering Consultancy & Testing(HORIBA MIRA, Ltd)・Environmental & Process Systems
・Environmental Radiation Monitor
・Environmental Regulation & Process Business

・In-Vitro Diagnostic (IVD) Systems
・Integration of HORIBA ABX’s
Technology & Marketing Know-how
・Mass Flow Controller
・In-situ Analysis
・Synergy among HORIBA HQ, HORIBA STEC, HORIBA Advanced Technoand HORIBA Jobin Yvon’s Technologies

・Raman, Grating, and Fluorescence・Synergy of HORIBA and HORIBA Jobin Yvon’s Technologies
42

Business Segments
Sales Breakdown by Segment

Sales: 195.3 B.JPY
13%

Automotive Test Systems

Scientific

26.1
（231）

Process & Environmental

Medical

27%

73.3
（649）

Semicon53.3（471）
Medical

Semiconductor

Automotive

25.1
（222）

P&E

17.4
（154）

13%
Scientific9%( ) =Segment Sales in MUSD
% = Segment Sales Ratio© 2018 HORIBA, Ltd. All rights reserved.

38%(Sales of FY2017)43

Market share
GlobalDomestic

Emission Measurement Systems

Automatic Blood Cell Counterplus CRP

80%

Stack Gas Analyzers

100%

20%

(As of December 31, 2015)

Mass Flow Controllers

57%

Raman Spectrophotometers

30%

Gratings

35%※Market shares quoted are estimates by HORIBA.

© 2018 HORIBA, Ltd. All rights reserved.

44

HORIBA Worldwide
Sales of FY2017 : 195.3 BJPY
(1,729 MUSD)

Sales Ratio by Region
EU
21%

Japan
33%

Americas17%© 2018 HORIBA, Ltd. All rights reserved.

Asia
29%

The Number of Group Companies by region(As of December 31, 2017)

Americas
Europe
Asia
Total

9
22
17 (4 in Japan, including HORIBA, Ltd.)
48
45

Employees by Region
Americas
2%

Other Europe

2%

U.S.A

7,399

11%
Germany

Japan

8%

Japan
38%
38%

UK

11%
France12%

Total Number of Employees

Other
Asia
14%16%

Total Asia : 4,041

54%
Total Europe： 2,414

33%
Total Americas： 944

13%(As of December 31, 2017)© 2018 HORIBA, Ltd. All rights reserved.

46

© 2018 HORIBA, Ltd. All rights reserved.

47