Shareholders Social Meeting

June 25, 2010

Ryosan Company, Limited(This notice has been translated from the original notice in Japanese. In the event of any
discrepancy between this translation and Japanese original, Japanese version shall prevail.)Today’s report
Today’s
1. Introduction of the new board structure
2. “Business Results for Fiscal 2009” and“Forecasts of Results for Fiscal 2010”
3. “Business Management Effort” for Fiscal 2010
4. Questions and Answers

01

Introduction of the New
Board Structure

02

New board structure
Representative
Director

Naoto Mimatsu

President

Director

Tsuyoshi Koyama

General Manager, 2nd Domestic
Marketing and Sales Headquarters

Senior Managing
Director

Harumitsu Seki

General Manager, Finance andAccounting Headquarters

DirectorSatoshi Takabayashi

General Manager, ProductionHeadquarters

Takeshi Honda

General Manager, AdministrativeHeadquarters

Managing Director Katsuyuki Suzuki General Manager, Semiconductor Director

Koji Honma

In charge of Overseas
Semiconductor Products
MarketingManaging Director Isao Hayashi

Naotsugu Kasuya(Full-time)

Yukio Tanaka(Full-time)

Managing Director Hiroshi Shibuya

General Manager, Sales
Director
Administration Headquarters(Concurrent positions held)
General Manager, International
Marketing and Sales Headquarters

Business Headquarters

Managing Director Itsuto Hamasaki

Director

General Manager, 1st Domestic
AuditorMarketing and Sales Headquarters(Concurrent positions held)
Auditor
General Manager, 3rd Domestic
Marketing and Sales Headquarters
Auditor
General Manager, Electronic
Components Business
Auditor
Headquarters

Tsuneo Sato
Kotaro Nakano

General Manager, Electronic
Equipment Business Headquarters

Toshifumi Sakata General Manager, Engineering
Headquarters

03

“Business Results for Fiscal 2009” and“Forecasts of Results for Fiscal 2010”04

Business Results for Fiscal 2009
Unit: ¥100 million【Segment information by business type】【 Consolidated 】
FY2009FY2009Of Total % Chg. YoY％Net sales

1,943

OPMargin％(12.0)

Sales

Semiconductors
Operating income

Gross margin168

8.7(14.0)

SG&A expenses

1206.2(10.3)

Operating income

472.5(22.1)

Ordinary income

532.7(26.9)

Electronic

Sales

Components

Operating income

Electronic

Sales

Equipment

Operating income

Ryosan Products

Sales(Heat sinks)

Operating income

Unallocable Operating expenses

Net income

281.5(26.8)

Sales

Consolidated
Operating income

Earnings per share¥83.21(¥28.6)

1,015
33604
232767473▲201,943
47％

3.3% Chg. YoY％(13.2)(31.9)(20.4)

3.8(17.9)＋29.7

2.8＋74.1(29.7)

8.4(22.5)-％(12.0)％％

2.5(22.1)

05

Segment information by business type “Business Results for Fiscal 2009”
Semiconductors Sales
Breakdown(¥ 100million)

1,169

Memories

102

＋29

1,015
131

System
LSIs

731

Electronic Components Sales
Breakdown(¥ 100million)

759

Display
Devices

193

Power
Supplies

107

(56)

(114)

604
137

(49)

58

617
Mechanical
Components
Discrete

336

(69)

FY2008

459

(50)
409

267
FY2009FY2008FY2009《Results for fiscal 2009》
・Sales of the system LSIs for digital AV devices
and car audio as well as related productsdecreased.

・Sales of the rechargeable batteries for game
consoles and LCDs for PNDs as well as
related products decreased.
06

Segment information by business type “Business Results for Fiscal 2009”
Electronic Equipment Sales
Breakdown

Ryosan Products Sales
Breakdown(¥ 100million)(¥ 100million)

276

67

213

47
DomesticSystem
Equipment

＋89

49

241

(13)

152

Facilities
Equipment

6136

(26)

FY2008Overseas

1835
FY2009FY2008(7)11FY2009《Results for fiscal 2009》
・Sales of the system equipment for automotive andelectric and MFPs as well as related products
increased.

・Sales of heat sinks for FA equipment aswell as related products decreased.
07Forecasts of Results for Fiscal 2010
Unit: ¥100 million【 Consolidated 】【Segment information by business type】
FY2010(Forecast)

FY2010 (Forecast)
OPMargin

Of Total % Chg. YoY％

Net sales

％

＋10.6

2,150

Sales

Semiconductors
Operating income

Gross margin

SG&A expenses

Operating income

Ordinary income

185
119
66
72

8.6

5.5

3.1

3.3

＋9.7

(1.5)

＋37.9

＋35.5

Electronic

Sales

Components

Operating income

ElectronicSales

Equipment

Operating income

Ryosan Products

Sales(Heat sinks)

Operating income

Unallocable Operating expenses
SalesNet income

42Earnings per share¥121.86

2.0＋46.5

Consolidated
Operating income％% Chg. YoY％

1,250
53 4.2607
23 3.9230
4 1.963
7 11.1

＋23.1

▲21-

2,150
66-

＋59.2
＋0.4
＋1.4(16.8)(43.0)＋33.5＋75.9％＋10.6％

3.1％

＋37.9

¥38.608

Trend in “returning profits to shareholders”【Reference】(¥100 million)

Net Income
Dividends
Acquisition of Treasury Stock
Concept of an overall distribution ratio

85％

7046％
5760

128％5050284066％
22676372％

3042203929282728202710@¥800

FY2006@¥80
FY2007@¥80
FY2008@¥60
FY2009@¥80
FY2010(Forecasts)

09

About the “Business Management Effort”
for Fiscal 201010

Business management
effort for fiscal 2010

Basic stance◆The business environment surrounding Ryosan is one in which our “truevalue as a company” is being requested by all stakeholders, including
customers and suppliers.
【Important themes in business management】⇒ Pursuing exchangeability of value with clients = Securing a workplace (field ofperformance) for employees⇒ Response towards Renesas Electronics[Management side]
Continual “policy proposal” utilizing the characteristics of RS[Worker’s side]
Devote ourselves unfailingly to CS activities, until reaching the point wherecustomers say they “want to do business with RS.”
11Business management
effort for fiscal 2010

About medium-term management plans◆Commence with new medium-term management plans fromfiscal 2011.
・Renesas Electronics, which is our major supplier and influences ourbusiness management the most, has just been founded, and so wewill design a new medium-term management plan after checking itsoutlook.

・We will select some themes from the themes of the 7th mediumterm management plan, and use them as the “themes for fiscal 2010.”

12

Business management
effort for fiscal 2010

Themes of initiatives for fiscal 2010

【Important Themes】
Pursuing “exchangeability of value with clients (customers and suppliers)”
Response towards “Renesas Electronics”【Themes Concerning Growth Strategies】
Business expansion for “overseas semiconductor resources”
Expansion of “China Bloc (Hong Kong, China and Taiwan) and Koreanbusinesses”【Themes Concerning Business Strategies】“Electronic components business”“Electronic equipment business”“Products Business”【Themes Concerning Management Infrastructure】
Improvement of “internal control” qualitatively
Response to “International Financial Reporting Standards”
Enhancement of the “RS (Ryosan) culture”
13Business management
effort for fiscal 2010

Important themes

Pursuing “exchangeability of value with customers”◆ Evolving into a partner who can speed up customers’ business expansions◆ Continually enhancing consultation functions for times of trouble◆ Further enhancing single-window functions

Pursuing “exchangeability of value with suppliers”◆ Implementing strategic alignments and shared objectives◆ Enhancing technical support capabilities in terms of both hardware and software◆ Enhancing global customer support◆ Building strong personal connections with customers

14

Business management
effort for fiscal 2010

Important themes

Response towards “Renesas Electronics”◆ Make thorough efforts to promote our value (3 characteristics) as an
specified sales distributor
・Extensive sales network
・Technological support capabilities
・Sound corporate structure◆ Swift development of systems for the “Renesas Electronics business”
・Enhancing our marketing system for customers
・Expanding overseas sales networks
15

Ryosan’s Three Characteristics
Extensive Sales Network
・27 bases have been developed in Japan・Expanding overseas since the 1970s
・21 bases have been developed mainly in Asia
(11 of which are in China)

・We have a technical department that wasestablished in the 1970s (and currently has around250 staff)
・We offer close customer support for customers inEast Asia
・We handle customer requirements right through tosystems development, such as software(microcomputers) and hardware (ASIC).

Technical support capability

・Secure financial structure・Ample funds for strategic investment
・Virtually debt-freeSound corporate structure16

① Extensive Sales Network【Technical Support Network】
・10 bases in Japan and Asia
(No. of engineers: about 250)

【Domestic Network】
・ 27 bases have been developed, covering
all of Japan【Overseas Network】
・21 bases have been developed mainly in Asia

・In particular, 11 bases are set up inmainland China (No. of local sales
representatives: about 140)
17

② Technical support capability
Digital AV
equipment
Systems Technologies

In-vehicle
equipment

We call on our extensive arrayof technologies to offer
suggestions on the best systems
and technical support.

Product technology

Element technologies

・Microcomputers （4bit to 64bit)
・ASIC (SoC, gate array, FPGA)・Analog ASIC
・Exclusive LSI・Power management device
・Display devices
・Compound devices

・Image processing, sound processing
・Telecommunication and Standard I/F(wired and wireless)・In-vehicle LAN, telecommunications
devices (CAN, LIN, FlexRay, MOST)
・Moter control
・Disk control (CD, DVD, Servo)
・Power supply management

Home appliances andhousehold equipment

Development technologies
・Hardware development(digital and analog)
・Embedded software development
・Reference board development

18③ Sound corporate structure【 Summary of Balance Sheet Fiscal Year Ended March 31, 2010 】(¥100 million)(¥100 million)

Currentliabilities

Safety Index

415
Currentassets

Equity ratio

72.5%

Current ratio

329.3%

Debt ratio

37.8%

Funds for strategic
investment

504

Long-term liabilities

27

1,368

Net assets

1,172
Fixed assets

247

Total assets＝1,615

・A financial structure that is unaffectedby recessions
・Funds sufficient for strategic investment
19Business management
effort for fiscal 2010

Themes Concerning Growth Strategies

Business expansion for “overseas semiconductor resources”◆Make three subsidiaries independent as soon as possible.
・Strengthening of profitability through the expansion of business scale (to gain
operating income early)
・Accelerating corporate growth by developing business infrastructure

Saxis Co., Ltd.
⇒Target increased sales focused primarily on businesses such as NXP andIntersil, etc.
Gyronics Co., Ltd.
⇒Target increased sales focused primarily on businesses such as Cypress andWinbond, etc.
CentrAct Corporation⇒Target increased sales focused primarily on businesses such as ST
Microelectronics, etc.
20

【Reference】

Trend in sales for “overseas semiconductor resources”(¥100 million)

192

200

18150

160

158

19134550

CentrActGyronics

35

10050096

FY2008110FY2009

123

FY2010 (Forecasts)

Saxis

21

Business management
effort for fiscal 2010

Themes Concerning Growth Strategies

Expansion of “China Bloc business (Hong Kong, China and Taiwan)”◆Strengthening of the capability to suggest systems in cooperation with
Chinese and Taiwanese distributors and design house, based on the productsof Renesas Electronics

Chip Business⇒ Initiatives devised by our PJ team for capturing key customers⇒ Digital AV, electric appliancesKit Business⇒ Sales strategies involving microcomputers and peripheral components⇒ Automotive and electronics, digital AV

Reference Business⇒ Sales expansion strategies using demo-models (hardware and software)⇒ Automotive and electronics, digital AV

Solutions Business⇒ Strategies involving turn-key solutions, through cooperation with Design House⇒ Automotive and electronics, TVs
22

Business management
effort for fiscal 2010

Themes Concerning Growth Strategies

Expansion of Korean business◆Business Strategy based on three primary area (automotive and electronics,cell phones and STB-related products)
・Semiconductors for inner automotive LANs ⇒ automotive and electronics
・Semiconductors for image signal processing ⇒ cell phones・Control-semiconductors for TVs ⇒ STB-related products
・Deepening connections through technical support⇒Technical support from Japan + Local technical support in Korea

23

【Reference】

Trend in sales for “business in China Bloc and Korea”(¥100 million)

580

600

514
500

400

39125

139

Korea

103

Taiwan

338

China

448

79
93

300

200

350
276
1000

FY2008FY2009FY2010 (Forecasts)

24

Business management
effort for fiscal 2010

Themes Concerning Business Infrastructure

Electronic Components Business◆Reforms towards “proposal-based business”(Supplier-based organizations + segment- and customer-based projects)

Electronic Equipment Business◆“Shifting towards a multi-vendor setup” and “enhancing product lineup”

Products Business◆“Developing cost-competitiveness for global competition” and “enhancing ourability to provide proposals for new products”

25

【Topics】

Inroad into new markets◆Cultivate new markets (LED lighting, energy, and environment) based on“ Ryosan Products business (heat sinks)”<Business performance for fiscal 2009>
Total

Photovoltaic
batteries andfuel cells

LEDlightingEV

Number of design-in projects

181251

Number of business deals

80214217

Number of samples

1281895

15

Business worth 200 million yen per year will be started

For LED lighting＜Exhibited at Lighting Japan in April 2010＞

LED lamp

26

Business management
effort for fiscal 2010

Themes Concerning Business Strategies

Improvement of “internal control” qualitatively◆ Increasing onsite staffs’ comprehension of internal control

Response to “International Financial Reporting Standards”◆ Starting project for adopting it.

Enhancement of the “RS (Ryosan) culture”◆ Conducting the “RS training” for diffusing the awareness of CSR for 3 years27

Medium-term Outlook

Image of achieving RS’s “Reproduction Plan”

・As an electronics engineering trading company, in order to meet the needs of a society that isbecoming increasingly globalized and high-speed, RS is now considering making reforms to a new
business model, called a “Reproduction Plan.”Domesticclient 1

Supplier A

RyosanDomesticclient 2

Supplier B

Supplier C

New supplier D

We hope tohave ourproducts soldexpertly.

Reproduction Plan

We wish topurchasenecessary
electronic
components
in bulk.

OverseasclientⅠ
OverseasclientⅡ

New supplier ENew supplier F

Domesticclient 3

This is a new mechanism for effectively achievingorganic exchangeability of value for semiconductor
and electronics products.

Overseasclient Ⅲ28