Financial Information
HORIBA, Ltd.
September, 2019
© 2019 HORIBA, Ltd. All rights reserved.

1

Contents
 2019 First Half Results 2019 Forecast Outlines by Business Segments
 Shareholder Return Other Topics
 Financial Data Corporate Profile© 2019 HORIBA, Ltd. All rights reserved.

2

Contents
 2019 First Half Results 2019 Forecast Outlines by Business Segments
 Shareholder Return Other Topics
 Financial Data Corporate Profile© 2019 HORIBA, Ltd. All rights reserved.

3

Review of 2019 First Half
External
Events The accelerating US-China trade conflict and the deteriorating
Japan-South Korea relationship Intensified Brexit uncertainties
 Slowdown in capital spending for semiconductors
 Automotive electrification trend and tighter emission regulations

Internal
Events Continually-enhanced R&D bases on a global level Aggressive launch of new products
 Selected as a “Nadeshiko Brand” and for the “Health &Productivity Stock Selection Program” by METI and the Tokyo
Stock Exchange© 2019 HORIBA, Ltd. All rights reserved.

4

Summary of 2019 First-Half Results
Significant year-on-year decrease in sales and profit
due to a slowdown of the Semiconductor segment

P&L Year-on-year decrease in sales and profit of the Semiconductor segment
 Decline in profitability of the Automotive segment due to a change in
geographical sales mix and other factors

B/S Total assets were ¥273.6bn, down ¥3.6bn, mainly due to collection of
accounts receivable Total liabilities were ¥111.6bn, down ¥3.6bn, mainly due to decrease inaccounts payable and loan repayment(Compared to the end of Dec. 2018)
 Equity ratio: 58.9%
 Operating CF: Cash in ¥13.8bn due to operating profit and collection ofCF© 2019 HORIBA, Ltd. All rights reserved.

accounts receivable
 Investing CF: Cash out ¥4.2bn due to acquisition of tangible fixed assets
 Financial CF: Cash out ¥7.2bn due to dividend payment

FreeCF+¥9.5bn5

2019 First Half Results(Billons of Yen)

2019 1st Half2018 1st Half
Results

Forecast(as of Feb.12)

vsForecast

- 8.3

- 4.3

- 5.7

- 2.2

-5.1p

-1.9p

10.3

- 5.6

- 2.2

10.5

7.0

5.7

- 4.7

- 1.2

108.67131.55110.00125.00110.06124.32

+1.39

+0.06

-7.23

-0.68

99.9

96.0

Operating Profit

14.0

10.5

OP %

14.1%

10.9%

Ordinary Profit

13.7

Net Profit attributable to
Owners of Parent

USD / JPY
© 2019 HORIBA, Ltd. All rights reserved.

vs
2018

91.6
8.2
9.0%
8.0

Sales

EUR / JPY

Results

6

2019 First Half Results by Segment
Operating Profit

Sales2019 1st Half2018 1st Half

: Record-hjgh

Results

Forecast(as of Feb. 12)

Auto

32.7

36.0

P&E

9.2

10.0

Medical

13.1

14.0

Semi

32.3

23.0

Scientific

12.5

13.0

Total

99.9

96.0

© 2019 HORIBA, Ltd. All rights reserved.

Results

34.3
9.1
12.6
22.7
12.6
91.6

(Billons of Yen)

2019 1st Half2018 1st Half
vs
2018

vs
Forecast

Results

Forecast(as of Feb. 12)

+1.6

-1.6

2.4

3.0

-0.0

-0.8

0.8

1.0

-0.4

-1.3

1.0

1.0

-9.6

-0.2

10.2

5.5

+0.1

-0.3

-0.5

-

-8.3

-4.3

14.0

10.5

Results

1.5
0.6
0.7
5.3
-0.0
8.2

vs
2018

vs
Forecast

-0.8

-1.4

-0.2

-0.3

-0.2

-0.2

-4.8

-0.1

+0.4

-0.0

-5.7

-2.2
7

Contents
 2019 First Half Results 2019 Forecast Outlines by Business Segments
 Shareholder Return Other Topics
 Financial Data Corporate Profile© 2019 HORIBA, Ltd. All rights reserved.

8

Market Assumptions for 2019
Auto
P&E

Medical

Semi

Scientific© 2019 HORIBA, Ltd. All rights reserved.

Strong appetite for investment in the global automotive sector due to tighter
emission regulations mainly in Asia and innovation for electrification &autonomous driving
Increase in demand due to tighter environmental regulations in emerging
countries
Recovery in investment in the oil industry
Japan: Favorable sales to doctors in private practiceOverseas: Increase in demand for blood testing equipment in emerging
countries
Subdued capital spending by semiconductor manufacturers
Anticipate a pick-up in investment, on the background of robust demand forsemiconductor devices from a mid- to long-term perspective
Robust corporate R&D spending
Accelerating research on new materials for secondary batteries
9Exchange rate

(Yen)

2018 Results
1sf Half

Full year

2019
Previous
Forecast(as of Feb. 12)

Results
1Q

2Q

1st Half

Forecast
2nd Half

Current
Forecast(as of Aug. 6)

USD

108.67110.44110110.22109.90110.06 109.94

110

EUR

131.55130.35125125.16123.48124.32 125.68

125

1 yen O.P. sensitivity for 2019 Forecast (Yen appreciation/Full year)
USD -230 million yen
EUR -20 million yen© 2019 HORIBA, Ltd. All rights reserved.

10

2019 Forecast(Billons of yen)

2019

2018
： Record-highResults

Previous
Forecast(as of Feb. 12)

Forecast(as of Aug. 6)

vs
2018

vs
Previous
Forecast

+2.4

-5.0

29.0

213.0
25.0

-3.8

-4.0

13.7%

13.3%

11.7%

-2.0p

-1.6p

Ordinary Profit

28.3

28.5

-3.8

-4.0

Net Profit attribute to
Owners of Parent

22.3

20.0

24.5
17.5

-4.8

-2.5

Net profit per share (Yen)

529
14.3%

474
11.9%

414
10.5%

-115

-60

-3.8p

-1.4p

Sales

210.5

218.0

Operating Profit

28.8

OP %

ROE
© 2019 HORIBA, Ltd. All rights reserved.

11

2019 Forecast by Segment(Billons of yen)

Sales
2019

2018

: Record-hjgh

Results

Previous
Forecast(as of Feb. 12)

Auto

79.6

85.0

P&E

19.3

20.0

Medical

26.0

28.0

Semi

57.7

55.0

Scientific

27.7

30.0

Total

210.5

218.0

© 2019 HORIBA, Ltd. All rights reserved.

Operating Profit

Forecast(as of Aug. 6)

85.0
20.0
28.0
50.0
30.0
213.0

2019

2018
vs
2018

vs
Previous
Forecast

Results

Previous
Forecast(as of Feb. 12)

+5.3

-

7.7

9.0

+0.6

-

2.0

2.0

+1.9

-

1.8

2.0

-7.7

-5.0

17.0

15.0

+2.2

-

0.2

1.0

+2.4

-5.0

28.8

29.0

Forecast(as of Aug. 6)

8.0
2.0
2.0
12.0
1.0
25.0

vs
2018

vs
Previous
Forecast

+0.2

-1.0

-0.0

-

+0.1

-

-5.0

-3.0

+0.7

-

-3.8

-4.0
12

Contents
 2019 First Half Results 2019 Forecast Outlines by Business Segments
 Shareholder Return Other Topics
 Financial Data Corporate Profile© 2019 HORIBA, Ltd. All rights reserved.

13

Auto

First Half Results and 2019 Forecast

2019 First Half Results
＋

EMS

＋

MCT1

＋

ECT2

Higher demand in China and India, driven byadoption of new regulations
Robust demand in Europe continued even after
the introduction of new regulations
Increase in projects in Japan and Europe
Business expansion in the next-gen automotive
technology development field

1: Mechatronics

2: Engineering Consultancy & Testing

34.0
28.1
2.9

＋

＋

-

Demand growth in China and India to continue
Increase in demand for fuel cell test systems
Aggressive investment to accelerate growth
Operating expense on an increasing trend© 2019 HORIBA, Ltd. All rights reserved.

30.6

5.5

O.P.
50.6

46.9

42.7

6.4
32.7

5.2

34.3

2.4

2.1

1.5

0.5
16. 1H 16. 2H 17. 1H 17. 2H 18. 1H 18. 2H 19. 1H 19. 2H
Fore.

【Full year】 Sales and O.P.
73.3
64.2

55.0

EMS
MCT
ECT

Sales

【Half year】 Sales and O.P.

2019 Full Year Forecast＋(Billions of yen)

79.6

Sales
O.P.
85.0

85.0

9.0

62.2
7.6

7.7

2017

2018

8.0

5.8
4.4
3.5

2014

2015

2016

2019
2019
Prev. Fore. Current Fore.

14

P&E

First Half Results and 2019 Forecast

2019 First Half Results

Sales【Half year】 Sales and O.P.

＋ 【Stack gas analyzers】

Strong sales in Japan＋ 【Air quality monitoring】
Decline from last year when a large project was recorded in Asia
Increase in demand in Europe【Water quality monitoring】＋
Sales increase due to business growth in emerging countries(Billions of yen)

8.9
7.7

9.3

9.2

8.0

O.P.

10.1

10.8
9.1

1.3

1.1

0.8

0.8

0.7

0.6

0.6

0.3

16. 1H 16. 2H 17. 1H 17. 2H 18. 1H 18. 2H 19. 1H 19. 2H
Fore.

2019 Full Year Forecast【Stack gas analyzers】
Anticipate business expansion in emerging countries,
including China and India＋ 【Process measurement equipment】
Robust demand due to rising crude oil prices＋ 【Water quality monitoring】
Robust sales of a new product, the water quality monitoring
system for ships＋© 2019 HORIBA, Ltd. All rights reserved.

Sales【Full year】 Sales and O.P.
16.4

16.7

16.7

17.4

2.0
1.7

O.P.

19.3

20.0

20.0

2.0

2.0

2.0

1.5
1.0

2014

2015

2016

2017

2018

2019
2019
Prev. Fore. Current Fore.

15

Medical First Half Results and 2019 Forecast
2019 First Half Results
Decrease in sales from Europe in yen terms due to theeuro’s depreciation against the yen＋ Business expansion in emerging countries, including China
and India＋ Enhanced sales of the new product but new entrants in themarket in Japan-

2019 Full Year Forecast
＋

＋

-

＋

-

Anticipate growth in micro-blood analysis system business,driven by a new product launch
Further business expansion in emerging countries due to anincrease in demand
Operating expense on an increasing trend© 2019 HORIBA, Ltd. All rights reserved.

(Billions of yen)
Sales

【Half year】 Sales and O.P.

O.P.
15.3

13.8

12.7

12.3

12.8

13.1

1.0

1.0

12.8

12.6

1.5
1.2
0.8

1.2
0.8

0.7

16. 1H 16. 2H 17. 1H 17. 2H 18. 1H 18. 2H 19. 1H 19. 2H
Fore.

【Full year】 Sales and O.P.
27.0

27.4

26.5

25.1

26.0

1.9

1.8

2017

2018

Sales
O.P.
28.0
28.0

2.8
2.4

1.7

2014

2015

2016

2.0

2.0

2019
2019
Prev. Fore. Current Fore.

16

Semi

First Half Results and 2019 Forecast

2019 First Half Results(Billions of yen)
Sales

【Half year】 Sales and O.P.

O.P.

32.3

Decline in both sales and operating profit comparing
with the previous year
Semiconductor manufacturers’ capital expenditureadjustment continued.

-

28.5
24.7

4.4

25.4

8.8

20.9
17.8

10.2

27.2
22.7

6.8

6.7

6.6

5.3

5.1

16. 1H 16. 2H 17. 1H 17. 2H 18. 1H 18. 2H 19. 1H 19. 2H
Fore.

2019 Full Year Forecast＋-＋

Anticipate the current condition to continue despitesome signs of investment recovery by semiconductor
manufacturers
Expect an increase in demand in the medium- tolong-term

Sales【Full year】 Sales and O.P.
53.3
35.3

38.8

15.6

57.7

O.P.
55.0

50.0

17.0
15.0

28.9

12.0
9.4

9.6

2015

2016

6.4
2014

2017

2018

2019

2019

Prev. Fore. Current Fore.
© 2019 HORIBA, Ltd. All rights reserved.

17

Scientific First Half Results and 2019 Forecast
2019 First Half Results＋＋

Sales increase in Asia and Americas on the background ofrobust corporate R&D spending
Improvement in profitability compared to last year when oneoff expenses were recorded in Americas

2019 Full Year Forecast(Billions of yen)
Sales

【Half year】 Sales and O.P.

O.P.
17.3

12.3

0.2

15.2

14.6

13.3

0.9

0.6

12.6

12.5

11.5

▲0.4

1.0

0.7
▲0.0

▲0.5

16. 1H 16. 2H 17. 1H 17. 2H 18. 1H 18. 2H 19. 1H 19. 2H
Fore.

Sales

【Full year】 Sales and O.P.
＋＋-

Anticipate profitability improvement and market development
through product customization
Enhance initiatives aimed for business expansion in thematerials analysis of secondary battery

25.6
1.2

27.0

25.7

26.1

27.7

30.0

30.0

1.0

1.0

2019

2019

1.3
0.9
0.4

2014

O.P.

2015

2016

2017

0.2
2018

Prev. Fore. Current Fore.
© 2019 HORIBA, Ltd. All rights reserved.

18

Contents
 2019 First Half Results 2019 Forecast Outlines by Business Segments
 Shareholder Return Other Topics
 Financial Data Corporate Profile© 2019 HORIBA, Ltd. All rights reserved.

19

Shareholder Return
 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)

Basic policy

Dividends per share and Share buybacks

Ordinary dividend: 125yen
Commemorative dividend for the65th anniversary of the company
foundation: 20yen 2017 Results 116yen [Interim 40yen/Year-end 76yen] 2018 Results 145yen [Interim 50yen/Year-end 95yen] 2019 Forecast 130yen [Interim 50yen/Year-end 80yen]

Per-share dividend (from 2004 to 2019 Forecast)
160
140

44.0%

Ordinary Div. (yen)Div. Total (yen)Commemorative Div. (yen)Total Return Ratio (%)

145

60.0%

20

50.0%

120
100

19.0%

80
60

17.0% 18.0%

40

17.0%

16

28
3
25

26

2004

2005

2006

20
0

30.6%
29.0%28.2%
26.8%

17.0%
9.0%
39

44

2007

2008

13

17

2009

2010

20.0%

50
10

40

40

2011

2012

27.6% 30.0% 27.4% 31.3%
116

60

67

70

2013

2014

2015

125

130

85

40.0%

30.0%
20.0%
10.0%
0.0%

2016

2017

2018

2019

Renewed record-highs in dividend in 9 years© 2019 HORIBA, Ltd. All rights reserved.

20

Contents
 2019 First Half Results 2019 Forecast Outlines by Business Segments
 Shareholder Return Other Topics
 Financial Data Corporate Profile© 2019 HORIBA, Ltd. All rights reserved.

21

Withdrawal from the ITS* business*ITS: Intelligent Transport Systems

 Developed and provided total management systems that enabledmonitoring of commercial vehicle driving information
 Commoditization of onboard devices made it hard to differentiate theproducts
 Will end to sell products and offer services by 2024
 Recorded non-operating income and expense in the second quarterof 2019 but the impact was immaterial.

Make use of knowledge of R&D/operation of cloud system services,
obtained in the ITS business, to develop new businesses.
© 2019 HORIBA, Ltd. All rights reserved.

22

Contents
 2019 First Half Results 2019 Forecast Outlines by Business Segments
 Shareholder Return Other Topics
 Financial Data Corporate Profile© 2019 HORIBA, Ltd. All rights reserved.

23

Operating Profit Analysis (vs 2018)(Billions of yen)

2018

2019

Jan. – Jun.

Jan. - Jun.

14.05

Decrease
Sales

-6.72

Exchange
Decrease
Impact for
Cost of
Goods Sales Gross Profit+2.51

Decrease -4.21
Gross Profit-0.61

Exchange
Impact for
Expenses+0.47

Exchange-0.14
ImpactIncrease
R&D Cost-1.23

Increase
Other
Expense

8.28

-0.18

Increase-1.41
Expenses

Decrease Operating Profit -5.77© 2019 HORIBA, Ltd. All rights reserved.

24Impact of Fluctuation in Foreign exchange
Exchange rate impact (2019 First Half results)
Sales -¥1.63bn O.P. -¥0.14bn
2019 First Half results
Decrease Sales
Decrease Cost of Goods Sales
Decrease Expenses
Impact to Operating Profit

(Yen)
USD
EUR

2018 1st Half 2019 1st Half
108.67110.06131.55124.32© 2019 HORIBA, Ltd. All rights reserved.

vs 2018- 1.63+ 1.01+ 0.47- 0.14Diff.
+ 1.39-7.23(Billions of yen)Exchange rate impact
for 2019 Forecast
1 yen impact of Sales and O.P.
(Yen appreciation)

USD
EUR

Sales
-¥0.44bn-¥0.37bn

Operating Profit
USD-¥0.23bn
EUR-¥0.02bn
(JPY)
USD
EUR

2019 Forecast
110.00125.0025

Capital Investment, Depreciation, R&D
2018
Result2019
Previous
Forecast(as of May 14)

Forecast(as of Aug 6)

Capital Investment

10.2

16.0

Depreciation

7.2

8.0

R&D

15.1

16.0

16.0
8.0
16.0

7.2%

7.3%

7.5%

(To Net Sales)

2019
Topics© 2019 HORIBA, Ltd. All rights reserved.

vs
2018

vs
Previous
Forecast(Billions of yen)

2018

2019

1st Half
Results

1st Half
Results

+5.7

-

5.7

+0.7

-

3.5

+0.8

-

7.2

5.1
4.2
8.2

7.2%

9.1%

-PP&E Enhancement of Asia bases, Investment to HORIBA MIRA,
Battery evaluation testing facility (HORIBA BIWAKO E-HARBOR)-R&D Increase in Automotive and Semiconductor segments

26

Consolidated Cash Flows(Billions of yen)2019
1st Half

2018
1st Half

Variation

Cash flows from operating activities+13.84+12.40+1.44

Cash flows from investing activities

-4.26

-4.43

+0.16

Cash flows from financing activities

-7.26

-4.31

-2.94

Cash and cash equivalents at end of year

64.64

61.47

+3.17

Free cash flows

+9.58

+7.97

+1.60

© 2019 HORIBA, Ltd. All rights reserved.

27

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

Total Loan Balance
46.7

Cash*
51.9

Bonds
15.0
Long
19.2

Cash*
58.3

Short
12.4

2016
237％
55％

44.0

42.0
Bonds
15.0

Cash*
62.8

Bonds
15.0

Long
18.7

Long
17.0

Short 8.3

Short
12.0

2017
239％
57％

2018
246％
58％

40.9
Cash*
64.6

Bonds
15.0
Long
16.8
Short 9.0

2019 end of Jun.
249％
59％

Bond
redemption
In 2020
Borrowed for
MIRA
Acquisition¥15.1bn
Redemption
In 2022
Current ratio
Capital ratio- Recent issuer rating : R&I “A” (Jul. 2019), JCR “A”(Aug. 2018)
Cash*…Cash and Cash Equivalents at End of Period.
© 2019 HORIBA, Ltd. All rights reserved.

28

Contents
 2019 First Half Results 2019 Forecast Outlines by Business Segments
 Shareholder Return Other Topics
 Financial Data Corporate Profile© 2019 HORIBA, Ltd. All rights reserved.

29

Business Segments
Automotive
Test Systems

Process &Environmental

Medical

Semiconductor

Scientific

Scientific

13%
Automotive

Net Sales
210.5 billion yen

Semiconductor

Sales by business segment (%)
Fiscal 2018
© 2019 HORIBA, Ltd. All rights reserved.

38%

28%
Medical

12%

P&E

Expanding in New
Domains and Moving ontoa New Stage

9%30

Global Network(As of December 31, 2018)

Sales

Sales

Sales

Sales

22%

31%

31%

16%

Europe

Asia

Japan

Americas

Americas

Other
Europe

2%

2%
USA
10%

Employees by Region

Germany

Japan

9%

38%

Americas991 （12％）9Europe2,637 （33％）

22

Other
Asia

Asia

4,315 （55％）

18 (4 in Japan, Including HORIBA, Ltd.)

17%

Total

UK
10%
France12%

The number of companies© 2019 HORIBA, Ltd. All rights reserved.

7,943

49
31

HORIBA’s Business Domainfrom Nano- to Cosmic-Level Analysis

Space
Development

Water Quality
Management

Agriculture

Plant factory
Monitoring system
Soil analysis
Compliance with
Food safety
waste water regulations
Safety management

New Material
Development
Secondary battery
Biomaterial
Steel and ceramics© 2019 HORIBA, Ltd. All rights reserved.

Global Environment
Conservation
Monitoring air pollution
Renewable energy/power plant
Greenhouse gases

Planetary probe
Auroral analysis

IT Infrastructure
IoT, Cloud, 5G
Automation informatics

Automotive/Ship Development
Ultra-low emission
Vehicle electrification, EV
Autonomous driving
Regulatory compliance

Manufacturing
Process
Semiconductor device
Solar panels
Petrochemical plant

Health andSecurity
Diagnostic equipment
New drug development
Drinking water
32

HORIBA’s Steady Growth: x10 Net Sales and x18 Op. Profit in 30 years

Fiscal year ending Dec. 2018
Net sales: 210.5 billion yen
Operating profit: 28.8 billion yen

Moving on to
the next stage
with our new
management

1953
HORIBA, LTD. wasestablished

1960

President

1970

1980

1990

2000

2010

Founded business as
student entrepreneur

Developed globally
successful products

Expanded businessglobally through M&A

Masao Horiba

Masahiro Oura

Atsushi Horiba© 2019 HORIBA, Ltd. All rights reserved.

Moving on to thenext stage with
our new management

Masayuki Adachi
33

HORIBA BIWAKO E-HARBOR© 2019 HORIBA, Ltd. All rights reserved.

34

HORIBA BIWAKO E-HARBOR
 Consolidating development, design, and production operationsof gas measurement equipment at a single location
 Doubling of production capability and shortening delivery time
to one-third by using a new production methodology
 Comprehensive engineering services from sales to development, production, and maintenance in the
Automotive testing laboratory• Profitability improvement of exhaust gas analyzers• Presenting cutting edge automotive development technology

Total investment: 10.0 billion yen, Location: Otsu City, Shiga Prefecture, Full operation : May 2016
© 2019 HORIBA, Ltd. All rights reserved.

35

HORIBA BIWAKO E-HARBOR© 2019 HORIBA, Ltd. All rights reserved.

36

Expansion of E-LAB for xEV Technology
Expanding E-LAB to add test facility for secondary batteries and fuel cells(Operation is planned to start in 2019)

CELL 0Additional facility© 2019 HORIBA, Ltd. All rights reserved.

CELL 1

CELL 2

CELL 3Cell and module testing, pack and fuel cell experiments
37

HORIBA MIRA

Information on page 40 to 41 are as of acquired the company.
© 2019 HORIBA, Ltd. All rights reserved.

38

HORIBA MIRA Ltd.
Providing Engineering Service with World Leading Mobility Development Capability and R&D
Location with Dedicated Facilities and Proving Ground
Business Offering

Established
Head office
Major locations© 2019 HORIBA, Ltd. All rights reserved.

1. Vehicle development engineering
2. Test engineering
3. MIRA Technology Park
(Providing Unique R&D Location)
1946
Nuneaton, Warwickshire, UK
U.K., China, and India

39

MIRA Technology Park
Various experiments using a large test course

MIRA Technology Park
30 customers

Test Site“35” Test Site
Wind Tunnels(3)/EMC(9)/Crash
lab/NVH Chassis/Battery test

© 2019 HORIBA, Ltd. All rights reserved.

1km

Proving ground• Performance(4.5km)• Off road
• Wet surface• City Circuit• Noise-Generating• Ride & Durability
Transmission test
Braking systems
Tire development
Durability
40Mid-Long Term Management Plan
“MLMAP2023”
HORIBA, Ltd.
September, 2019
© 2019 HORIBA, Ltd. All rights reserved.

41

MLMAP2023

1. Looking back on the current plan
(MLMAP2020)
2. Numerical Targets
3. Priority Measures
4. Segment Strategy
5. Regional Strategy
6. Capital Strategy© 2019 HORIBA, Ltd. All rights reserved.

42

MLMAP2023

1. Looking back on the current plan
(MLMAP2020)
2. Numerical Targets
3. Priority Measures
4. Segment Strategy
5. Regional Strategy
6. Capital Strategy© 2019 HORIBA, Ltd. All rights reserved.

43

20-Year Operating Results and Progress of MLMAP2020
Achieved continuous sales growth and high profitability
グループ管理through proactive investments with a long-term perspective
250.0

1.8 times sales growth in 8 years from 2010
Sales

Operating income

105.6
74.4

11.2

170.8 170.0

Net income

12.2

11.7

30.0

28.8
25.0

118.5 123.4

116.0

210.5 213.0

MLMAP2020
Profit plan
Operating income: ¥30bn⇒Achieved 96% in 201819.3 18.4

Net income: ¥20bn

22.3

14.9

(Billions of yen)

20.0
17.5

⇒Achieved in 201812.8 12.9
2.5
6.4

7.9

6.5

8.6

-1.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

（Fore.） （MLMAP）

2001-2005

2006-20102011-2015[Change of Fiscal Year-end］ For the year ended December 31, 2006, the accounting term for HORIBA, Ltd. and its domestic consolidated
subsidiaries in japan was only 9 months and 11 days or only 9 months as a result of a change in the fiscal year-end to December 31. The
fiscal year ended March 2006 is stated as 2005, the fiscal year ended March 2005, as 2004, and the fiscal year ended March 2004, as
2003.
© 2019 HORIBA, Ltd. All rights reserved.

2016-2020
HORIBA, Ltd. and its domestic consolidated subsidiaries had formerly recognized revenue mainly on a shipping basis.
However, starting from fiscal 2016, HORIBA, Ltd. and its domestic consolidated subsidiaries changed their revenue
recognition method to a completion-date-of-installation or delivery-date basis under the terms and conditions of therelevant contracts. The amounts in or before fiscal 2015 are not retrospectively revised.

44

Main Topics, 2016-2019 ［M&A/Capital Investment］
Investing to expand business scale and areas at a time of drastic change in industrial structure

New businesses acquired through M&As
[UK]MIRA Ltd.
Strengthening
the engineering capability© 2019 HORIBA, Ltd. All rights reserved.

[DE]FuelCon AG
Strengthening
the battery measurementbusiness[US]MANTA Instruments, Inc.
Strengthening particle
measurement business

Micro-blood analysis
system business acquired
from ROHM Co., Ltd45

Main Topics, 2016-2019 ［M&A/Capital Investment］
Investing to expand business scale and areas at a time of drastic change in industrial structure
Strengthening development/production capabilities: ¥40bn invested in 3 years[US] Optical measurement
technology
Strengthened the
production/R&D base[US]Semiconductor business
Strengthened the R&D base[KR] Consolidation of
production/sales/service base© 2019 HORIBA, Ltd. All rights reserved.

[JP]Aso plant
The 5th expansion[US] Process measurement
A new base for facility
business[US]Support to a new
institute of the
University ofCalifornia[JP] Battery evaluation
test facility[IN] HORIBA India[IN]Test
centerforTechnical
Centerautomotive[JP]HORIBA BIWAKO E-HARBOR

46

Background in Launching MLMAP2023
Urgent need to respond to the accelerated changes in business environment
Significant changes in the trendof automotive industry

Electrification/
Autonomous driving

New entrants

Accelerated advanced intechnology development

AI/IoT

Bio/ healthcare Advanced
materials

Increasing interest
in solving social issues

SDGs/
Environmental
Workstyle reform
ESG
protection investments
Diversity

Open up a new era toward 2023, the 70th-anniversary year of HORIBA’s founding,by utilizing all HORIBA resources under its new management team from 2018
MLMAP2023 Slogan© 2019 HORIBA, Ltd. All rights reserved.

ONE STAGE AHEAD
47

MLMAP2023

1. Looking back on the current plan
(MLMAP2020)
2. Numerical Targets
3. Priority Measures
4. Segment Strategy
5. Regional Strategy
6. Capital Strategy© 2019 HORIBA, Ltd. All rights reserved.

48

Numerical Targets of MLMAP2023
Net sales¥300.0bn

Operating income¥40.0bn

Net income
EPS¥30.0bn(Earnings Per Share)

ROE
Total return ratio¥711
10% or more
Target around 30%

Foreign exchange rate assumptions: ¥110/US$, ¥125/Euro© 2019 HORIBA, Ltd. All rights reserved.

49

Numerical Targets of MLMAP2023
Advancing to the next stage with continuous growth in sales and profit

1.5 times growth from 2018

(Billions of yen)
300.0

40.0

CAGR

30.0

Sales
20152018:7.2%
20182023:7.3%
Operating income
20152018:14.2%
20182023:6.8%
Net income
20152018:20.1%
20182023:6.1%

210.5 213.0

Sales

Operating income

Net income

170.8 170.0

28.8
25.0

19.3 18.4

22.3
17.5
12.8 12.9

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20192023

（fore.）

2001-2005

2006-20102011-2015（MLMAP）

2016-20202019-2023© 2019 HORIBA, Ltd. All rights reserved.

50

MLMAP2023

1. Looking back on the current plan
(MLMAP2020)
2. Numerical Targets
3. Priority Measures
4. Segment Strategy
5. Regional Strategy
6. Capital Strategy© 2019 HORIBA, Ltd. All rights reserved.

51

Priority Measures of MLMAP2023
MLMAP2023 Slogan “ONE STAGE AHEAD”
1. Market Oriented BusinessTo develop analysis and measurement solutions, utilizing HORIBA’s core technologies, in theleading three business fields of the mega trend

2. Solution Provider Beyond Life Cycle Management
To support customers’ core businesses from all aspects – from product introduction to
replacement

3. HORIBA Core Values “The Next Stage of Super Dream Team”
To enhance the organizational structure that fosters resilient human resources, which are thedriving force of all businesses
BlackJack Project/Stained Grass Project/HORIBA Premium Value© 2019 HORIBA, Ltd. All rights reserved.

52

HORIBA’s Core Technologies
Gas flow control

Semiconductors

Infraredmeasurement

Spectroscopic
analysis

Particle analysis

Liquid analysis(Electrochemical analysis)

Automotive Test Systems Process & Environmental
Automotive Test Systems

ScientificProcess & Environmental
Medical-Diagnostic

Semiconductor

Semiconductors
Scientific

Automotive Test Systems
Process & Environmental Process & Environmental

Semiconductors
Medical-Diagnostic

ScientificConcentrate R&D resources into specific analysis/measurement technologies.
By applying the core technologies, develop products efficiently in our five businesssegments, which target different markets, and launch them.
© 2019 HORIBA, Ltd. All rights reserved.

53

Priority Measure 1: “Market-Oriented Business"
To develop analysis and measurement solutions, utilizing HORIBA’s coretechnologies, in the leading three business fields of the mega trend
MarketEnergy&Environment

Materials&
Semiconductor

Bio&
Healthcare

Main Targets

Mobility, Powergeneration, Environmental
preservation, Water

Advanced materials,
Materials forsemiconductor

Clinical diagnostic,
Pharmaceutical, Drugdiscovery, Cells, DNA

Semiconductor

Medical-Diagnostic

Corresponding
businesssegments

Automotive Test Systems

Process & Environmental

ScientificAims to transform itself into an entity that accelerates innovation by "measurement" technologies© 2019 HORIBA, Ltd. All rights reserved.

54

Priority Measure 2:
Becoming a “Solution Provider Beyond Life Cycle Management”
To support customers’ businesses from all aspects,
from installation to replacement

Products/Solution Packages
Support the efficient operation ofcustomers’ facilities
Accurate facility management utilizing data from operations

Data fromoperations

Consulting with analysis technologies
Offer new value via analysis of measured data

Measured data

Integrate equipment sales withhigh-value-added support

Always with you: HORIBA is always on the customer’s side© 2019 HORIBA, Ltd. All rights reserved.

55

Priority Measure 3： “HORIBA Core Values”
The next stage of the Super Dream TeamBlackJack ProjectTo bring about changes in our awareness andactivities, the project has yielded a system forsharing front-line operating information withthe management
 The cumulative number of project
themes exceeds 9,000; collectively
they are an integral part of HORIBA's
corporate culture.
 Leads the activities to turn in profits
from investments

Policy for 2023

Stained Glass Project
HORIBA’s diversity promotion project[Themes]
2014: Women’s empowerment
2017: Connect theManagement/HR/Front-line

Diversity promotion
Improvement in productivity,
corporate competitivenessJob satisfaction
Selffulfillment

Comfortable working
environment
Workingenvironment
improvement

Certified forthe first timein 2019

Policy for 2023

 Expand the BlackJack Project
overseas (Asia)

 Promote personnel exchanges among groupcompanies

 Make it a group-wide project Pursue both job satisfaction and comfortableworking environment

Bring the management closer tothe front-line globally© 2019 HORIBA, Ltd. All rights reserved.

→ Promote activities globally
HORIBA’s World Cup goes tothe best proposal from reps fromseveral nations. In 2018, India
won first prize.

→ Lead the personnel system reform

Adopted a remote-work system in Jan. 2019

The Nadeshiko
Brand award
ceremony56

Priority Measure 3: “HORIBA Core Values”
Improve asset efficiency with HORIBA Premium Value
Budgeting by using HORIBA’s unique KPI (subtracting “Cost of
Capital” from “Operating Income”) that measures capital efficiency

Approach for the enhancement of
capital efficiency

HORIBA Premium Value
Operating income

Cost of Capital[Invested Capital X Internal WACC]

A simple calculation method, easily adopted by group companies
Use of “Operating Profit,” monitored by business divisions everydayEvaluate in absolute monetary terms, easily capturing effects andtargets achievement

Flexible Procurement
Just in Time!
Well recognized globally© 2019 HORIBA, Ltd. All rights reserved.

Proper Working Capital
Ultimate Supply Chain
CCC* Improvement!
Stream Production!
Adequate global control of Accounts
Reform of entire production
Receivable and Inventory
processes with partner companies*CCC: Cash Conversion Cycle

57

MLMAP2023

1. Looking back on the current plan
(MLMAP2020)
2. Numerical Targets
3. Priority Measures
4. Segment Strategy
5. Regional Strategy
6. Capital Strategy© 2019 HORIBA, Ltd. All rights reserved.

58

Vision of MLMAP2023

Application-driven business
Provide the best applications in four business areas.
Establish a position as an indispensable partner in the automotive development field.

Emissions: Engine/exhaust gas Energy efficiency: Electrification

CAV: Connected/autonomous
driving system

Enterprise Data Management for Development: Overall vehicle-related R&D

Target for 2023
© 2019 HORIBA, Ltd. All rights reserved.

Sales of ¥120bn; Operating Income of ¥12bn
59

Emissions: Strengthening the existing areas andchallenging growth areas
Solutions for fuel efficiency and exhaust gas
regulations (Strengthening the existing areas)
Globally, continuing tighter regulations
Flexible applications for emission
measurement

Exhaust gas Mechatronics Test Automation
analyzers
Systems

Proactive launchof new products

New product “FTX-ONE”(To evaluate engines and catalysts)

Providing diverse regulation-related line-ups from all directions

Optimal powertrains (Challenging growth areas)
Electrification leads to an increase in systemdevelopment, shifting away from single-unit (i.e.,engine, battery, or motor) development
Propose a “package” to solve issues related toanalysis and measurement
Fuel cell
test system

Motor
test system

Enginetest system

Battery
test system

Efficient application for RDE* is imperative
Create a lab environment for accurate Real Driving Emissions simulations

Automatic driving
systemFour-wheel drive
test system

Advanced emissions
test facility

Provide systems that help shorten the development process*Real Driving Emissions Regulations© 2019 HORIBA, Ltd. All rights reserved.

Maximize the Group synergy and provide total solutions
60

Energy Efficiency：
Maximize the electrification businessContribute to optimizing the development process of electric vehicles
Establishment of the “CELL Zero” test facility forevaluation of batteries for electric vehicles(Scheduled to open in HORIBA BIWAKO E-HARBOR in 2019）

CELL Zero to be connected with CELL 1, 2 and 3

Objective of “Test in the Loop”
Proposal of a highly-efficient R&D environment
for electric vehicles• Data measurement in virtual environment of a real vehicle• Performance verification, using a real vehicle with theembedded simulation model
Battery Test
Fuel Cell Test
Powertrain Test
Electric Motor Test

Discharging

Vehicle Test
Charging

Engine Test

Provide measurement solutions with new values
with the “Test in the Loop” total evaluation system© 2019 HORIBA, Ltd. All rights reserved.

Advanced concept for vehicle development
to connect the real and the virtual

2023：Achieve sales of ¥10bn in theelectrification business
61

CAV*: Acquisition of Initiatives in Advanced Technology* CAV: Connected and Autonomous Vehicle“Drive/Turn/Stop & Protect” - Support R&D from all directions(HORIBA MIRA’s initiatives)
Drive/Turn/Stop
Multi-purpose tests forautonomous vehicles
 Verification of telecommunication function,
vehicle safety/limit control range

Test facilities to verify anautonomous parking
functionOpen in 2020

Open in 2020

In cooperation with the UK government and local
universities, HORIBA aims to take initiative in the R&D
domain of autonomous driving technologies

Protect
Opened the Vehicle Resilience*
Technology CentreSupport of R&D of autonomous driving
technologies
Comprehensive approach thatcombines cyber security and EMC

Opened in April 2019
• Resilience: Solutions that eliminate threats associatedwith advanced vehicle technologies

HORIBA MIRA’s initiatives were broadcasted in Japanese TV station KBS Kyoto’s news program"KyobizX“. (Go to HORIBA’s website to see the program in Japanese at HORIBA’s official Facebook）© 2019 HORIBA, Ltd. All rights reserved.

62

Enterprise Data Management for Development：
Contributing to optimizing overall vehicle R&D
Contributing to the front-loading of automotive development(reduction in man-hours from shorter development process)Core system that integrates and manages analysis and measurement data

①Front-loading the peak of workload
Required workload

Man-hours for R&D© 2019 HORIBA, Ltd. All rights reserved.

New carlaunchConventional
development
process②Shorten man-hours
for R&D

Efficient
R&D process

Start planning

New carlaunchKnowledge in engineering and testing

Contributing to realizing efficient R&D processes
1. Front-load R&D processes
 Centralize various data Utilize applications with high reproducibility andsimulation software
2. Improve man-hours efficiently by reducing theamount of rework
63

Vision of MLMAP2023
HORIBA as a worldwide player who analyzes the entire earth
Provide various solutions in the global market: ranging from approaches toenvironmental regulations, to raising production efficiency

Business growth inemerging countries[Approaches to environmental reg.]

Target for 2023
© 2019 HORIBA, Ltd. All rights reserved.

Open up markets
in developed countries[Improve industrial processes]

Grow globally in thewater monitoring business

Sales of ¥28bn; Operating Income of ¥2.8bn
64Global Trend and Growing Needs of Environmental
Measures
Increased awareness on global environmental preservation⇒ contribution to productivity improvement
Phase to improveindustrial processes
Phase for improving theenvironment

DemandApproaches to
環境汚染～環境規制導入
environmental
regulations
Product sales/Repair/Maintenance

Developing
countries

High productivity/Optimization/Data management

Emerging
countries

Developed
countries

Phase of social growth© 2019 HORIBA, Ltd. All rights reserved.

65

Growth in Emerging Countries/Developed Countries

Needs

Emerging Countries (Southeast Asia, etc.)

Developed Countries

Approaches to environmental regulations

Approaches to env. reg.＋ Industrial process improvement

Improveair

Gaspollution

Respond to local needs

Enhancelocalization of
production andengineering
Stack gasanalyzers

Improve
water

Water

quality

Bring successful businessmodels to other countries

Developbusiness withlocal partners
Automatic total
nitrogen/phosphorus
monitoring system© 2019 HORIBA, Ltd. All rights reserved.

Air pollution
analyzers

Water
monitoring
system forwater supply
facilities

Industrial
process
measurement

New measurement
solutions for
production processes

Electronic
industry/marketCapture demand forfactory-related water
quality/gas measurement

Data
management

Higher productivity
in the petrochemical sector
Improve combustion
efficiency in power
plantsComprehensive
support insemiconductor
manufacturing

Realize a skill
transfer andreduction in
manpower infacility
management
66

Global Growth in the Water Measurement Business
Process &Environmental

Semiconductor

Scientific

Sales expansion in the tap water monitoring market
Kuala Lumpur(Malaysia)

Sao Paulo(Brazil)

Water measurement business

Integrated into
HORIBA Advanced Techno Co., Ltd.

Tap water
qualitymonitoring
systemMonitoring ofwater discharge
in the tap water
infrastructure
investment

Undertake data management andrealize reduction in manpower

Utilize existing technologies and sales
network and aim to grow globally© 2019 HORIBA, Ltd. All rights reserved.

Free installment of analyzers ⇒ Charge for measured data
67

Vision of MLMAP2023
To be a Preferred Partner
Expand product portfolio from small to large scale analyzers.
Accelerate global business expansion.

Enhancing strength
Sales development in the small- andmedium-sized market

Target for 2023
© 2019 HORIBA, Ltd. All rights reserved.

Entering the large-scale
marketCapturing emerging
markets

Access to the hospital market

Enhance business in India/China

Sales of ¥40bn; Operating Income of ¥4bn
68

Expand Business Domains
Use of proprietary technologies andalliances for further expansion
Test Category

Hematology

Market size
Large
hospitals

¥2tn

¥2tn

Coagulation¥0.2tnHospitals

Alliance

Small- andmediumsized
hospitals

Business environment• Increase in testing in the background of the aging society• Increase in importance of clinical diagnosis by primal caredoctors

HORIBA’s strategy

Alliance

Testing
centers

Hospital units andsurgery rooms

Immunology¥0.35tn(HORIBA’s estimates)

Private practitioners

ClinicalChemistry

Enhance strength in
the small- to medium-sized market

Alliance

HORIBANew applications
with μTAS*
Technology

 Use μTAS* technologies, acquired from ROHM, todevelop products with hematology plus extra functions
 Support process optimization at the customer site byintroducing the data management system.
 Expand product line-ups in the clinical chemistrycategory through business alliance.

(POCT)

Small- and medium-sized market: Expand application toclinical chemistry and Immunology.
Hematology: Enter the large-scale market.
© 2019 HORIBA, Ltd. All rights reserved.

*μTAS: Micro Total Analysis System acquired from Rohm Co., Ltd. 69

Entering Large-scale Markets and Focusing on
Particular Markets
Expand business in large-scale markets

Strengthen global network/supply chain

Business environment• European market: centralization of testing atlarge-scale laboratories and productivity
improvement• Emerging markets: increase in testing

HORIBA’s strategy
 Expand sales of HELO Solution, the first productfor a new large-scale market
 Alliance with Siemens Healthcare Diagnostics
Inc. to enter the large-scale market

FranceFrance
China

Japan

US

India
BrazilMarkets tofocus onR&D
center

Supplyapplication

Reagent
factory

R&D: product development in Japan and France
Production/sales: enhance local capabilities in themarkets to focus

Enhance HORIBA’s strength and expand into a new stage.
© 2019 HORIBA, Ltd. All rights reserved.

70

Vision of MLMAP2023

Shape the market, sell the solution
Evolve the company into a comprehensive supplier that provides high-value-added solutions in all
semiconductor manufacturing processes, from R&D to aftermarket services

Enhance the existing fields

Extend coverage

Taking up challenges in new fields

Establish a robust R&D network and supply chain

Target for 2023
© 2019 HORIBA, Ltd. All rights reserved.

Sales of ¥77bn and Operating Income of ¥17.7bn
71

Semiconductor Market Projection and
HORIBA’s Market Share in Mass Flow Controllers (MFC)
US$1bnHORIBA’s global market share in MFC(RH)

700

70%

60%

Market size by semi. device type(LH)

604

600
500
400

60%

OthersAnalogDiscrete and Opto Electronics
Flash Memory
DRAM
Logic

486

50%

40%

347

300

30%

200

20%

100

10%

-

0%

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Semiconductor market projection: Data from VLSI Research, modified by HORIBA
Market share of MFC: HORIBA’s estimates (as of August 2019)© 2019 HORIBA, Ltd. All rights reserved.

72

Extend Coverage and Take up the Challenges of
New Fields
Provide high-value-added solutions in semiconductor manufacturing processes
R&D

Wet/Lithographprocess

CVD/Etching process

Contribute toevaluation/analysis of
next-gen materials

 Increase in processes due to miniaturizationand multi-layering Cope with a wide variety of materials

SPE’s controlling process
Raman
spectrometers

Elemental
analyzers Deal with micro particles,
pay attention to safety
 Extreme rays applied for
EUV, etc.
High-precision wet/lithograph processes

Expand flow control applications as new solutions
related to a vacuum chamberPressure
monitoring
Fully automated X-ray analytical
microscope
ellipsometer

Nano particle
analyzers

Cathodoluminescencemeasurement
system© 2019 HORIBA, Ltd. All rights reserved.

Chemicalconcentration
monitors

Gas/liquidflow control
Measurement/
Analysis

Reticle/mask particle
detection system

Accumulate analysis and measurement data

Conductivity
Meters

Gratings

Challenge to add
new value Various analysis
and measurement
technologies andexperiences Use of big data
for the processcontrol of SPE to
optimizemanufacturing

Contribute to improving
productivity in semi.
manufacturing processes
73

Establish a Solid R&D Network and Supply Chain
Global R&D system

Enhance supply capacity

Enhance R&D operations in Kyoto and
Fukuchiyama (Japan), and Reno(US)Production system in Japan
Accelerate local engineering in China

Reflect customers’ needs in R&D
Aim to gain higher market share

Increase production capacity and supply timely

Advanced Technology Center
1. Research next-gen
semiconductor
manufacturing
process
2. Standardize flow
control

Develop key
components

Kyoto

Capture local needs→ cooperate with aJapanese team

Fukuchiyama
Technology Center

Reno Technology Center

Fukuchiyama, Kyoto

Nevada, US© 2019 HORIBA, Ltd. All rights reserved.

Facility expansion to boost production volume

Aso, Kumamoto, Japan
Kyoto: production ofChina: supply mass flow
high-end models
controllers tailored for local needs

Kyoto

Beijing,China
中国・？？？
74

Vision of MLMAP2023

Core Technology Provider
Apply the technology cultivated as a founding business in the megatrend market.
Leading “HORIBA in Technology” in cooperation with each segment

Advanced materials

Bio

Energy, Semiconductor, Water

Customized technology to meet all customer needs; Local engineering for local needs

Target for 2023
© 2019 HORIBA, Ltd. All rights reserved.

Sales of ¥35bn and Operating Income of ¥3.5bn
75Advanced Materials and Bio Field
Maximize synergies by effectively using resources from three global bases
HORIBA FRANCE(France)

HORIBA(Japan)

HORIBA INSTRUMENTS (US) A leading company inspectroscopic analysis
 Increase market shares by more
applications in various fields

 Utilizing various technologies as a“headquarter of core technology”
 Flexible product customization→Leading in industrial processes Deploy applications that satisfy
customer needs
 Strengths in bio, healthcare, andnano technology areas

Jobin Yvon
Boasting a 30% global share*(Horiba France at present)
Raman spectrometer*In-house survey as of August 2019
200th anniversary in 2019

Founding technology［pH meter］

A wide range of technologies［Water monitoring/Particle-size
distribution analysis/
Elemental analysis］

Targeting the bio market
Opened a new base on the［Fluorescence andEast Coast (2018)absorbance spectrometer/
to strengthen R&D and
Nanoparticle tracking
production capacity
analysis system］

Provide innovative solutions that support the technological progress in the world【Advanced materials】• Advanced nano-level spectroscopic analysis technology• Approach to 2D materials and micro plastics© 2019 HORIBA, Ltd. All rights reserved.

【Bio】• Develop applications for analysis of
cosmetics, pharmaceuticals,
viruses, and vaccines76Energy, Semiconductor, and Water
Collaborate with other segments to realize business expansion by using their sales channels
Energy and automotive industry
 Increase in demand for secondary
battery material analysis
Raman spectrometer

Nanoparticle
analyzer

Dissolved organic matter in water
Fluorescence measuring device

Semiconductor Growth of Chinese semiconductor
manufacturers
 Increase in demand for analysis andevaluation of semiconductor materials

Profit from electrification in China
Increase in demand for battery
material analysis
Accelerate industry penetration ofspectral analysis technology

Water quality measurement
 Efficient water management atwater treatment plants Seek to contribute to solving
environmental issues centered on water

Held the raman/fluorescence spectroscopy symposium

Aiming to increase volume by expanding the range from R&D to production processes© 2019 HORIBA, Ltd. All rights reserved.

77One-to-One Customization & Global
Engineering
Accelerate product development
for customer needs

One to One Customization
Customization & Engineering

Inline/online measurement
Contributing to improving production Thermometer for battery
production line
processes
Analysis efficiency enhancement(work efficiency)

Strengthen uniqueness inglobal engineering
Founding
Technology

GlobalEngineering Propose products for customers based on
analysis of their needs
 Secure high profitability through diversity inproduction selectivity

Efficiency through automation

Imaging
Efficiency by visualizationof analysis data

Particle size
distribution meterwith autosampler

Highly-difficult measurement samples
Proposal for analysis using a new method© 2019 HORIBA, Ltd. All rights reserved.

X-ray equipment for
precious metals

New pH meter (announced in August 2019)
Launch of global products, made in Singapore78© 2019 HORIBA, Ltd. All rights reserved.

79

MLMAP2023

1. Looking back on the current plan
(MLMAP2020)
2. Numerical Targets
3. Priority Measures
4. Segment Strategy
5. Regional Strategy
6. Capital Strategy© 2019 HORIBA, Ltd. All rights reserved.

80

IndiaVision of MLMAP2023
Think Big. Grow Bigger.
Strengthen sales and the service network, rooted in the local society
Provide high-value-added analysis/measurement technologies
Enhance engineering/facility capability
 Establish local bases tostrengthen engineering capability
 Provide products andtechnologies that meet local
needs

The technical laboratory at Pune, India, opened in July 2019

Enhance supply network
 Capture demand in clinical testingalong with population growth Enhance a supply network tomaintain stable volume and quality
Reagent production/logistics line at Haridwar© 2019 HORIBA, Ltd. All rights reserved.

Sales of ¥13.0bn

2023 plan
2023
MLMAP

ATS*

P&E

+37%
2018
Results

Sci+20%¥7.5bn+26%
2015
Results

Medical+15%¥3.2bn*ATS: Automotive Test System

Capture demand in a volume zone andbecome a driver of future growth81ChinaCurrent Status and Changes in China Market

China:

Rapid growth and changes in the market
Growth and technological improvement of local companies

HORIBA: Invest aggressively and realize further growth in China at the time ofchanging trends in technology

1. Strengthen “production capacity”
for the Chinese market
2. Strengthen “R&D capability” for the

Chinese market

Plan for 2023
2023
MLMAP

ATS

Sales of ¥47.0bn
P&E ME

Semi

SCI

+13％
2019
Result¥27.8bn+16％

 Establish an application center Collect cutting-edge information© 2019 HORIBA, Ltd. All rights reserved.

2015
Result¥20.5bn

Implement the strategy at “China speed” and drive growth82

MLMAP2023

1. Looking back on the current plan
(MLMAP2020)
2. Numerical Targets
3. Priority Measures
4. Segment Strategy
5. Regional Strategy
6. Capital Strategy© 2019 HORIBA, Ltd. All rights reserved.

83

Shareholder Return and Financial/Investment
Strategy
Shareholder return policy

Financial/investment strategy

 Dividend payment + Share buyback = 30% ofconsolidated net profit* to be targeted Retained earnings will be used for strategic
investment(i.e., CAPEX, M&A)
*In fiscal 2013, the policy was shifted from the non-consolidated dividend payout ratio, based on non-consolidated
net income of HORIBA, Ltd., to the total return ratio, based on HORIBA’s consolidated net income.

1. Invest effectively from a long-term
perspective
2. Utilize intra-group financing
 Utilize financial group companies (US,Europe, UK and China)
3. Utilize HORIBA Premium Value (PV) to
improve asset efficiency

Per-share dividend and total return ratio

Free cash flows for every five years

（yen）

100

160

120
100

28.6%

80
60

19.5%

40
20

145
20

Commemorative Div. (yen)Ordinary Div. (yen)Total Return Ratio (%)

140

28.2%

26.8%

50
10

40

40

2011

2012

30.6%

27.6%

30.0%
116

60

67

70

2013

2014

2015

60.0%

27.4%
125

50.0%
31.3%

89.9
61.1
31.9

14.7

2016

2017

2018

2019
(Forecast)

Improve capitalefficiency byutilizing the PV

0

-34.4

20.0%

-29.1

85

0

© 2019 HORIBA, Ltd. All rights reserved.

40.7 6.2

40.0%
30.0%

130

50

Operating CF
Investing CF
FCF

10.0%

-50

0.0%

March 2005 to
December
2008
-100

-75.1
January 2009 to
December 2013

January 2014 toDecember 2018

Invest effectively
from a long-term
perspective(Billions of yen)84

Thoughts on ESG investment and SDGs

Semiconductor

G: Governance

Medical-Diagnostic

S: Social

Process & Environment

E: Environment

Automotive Test

Scientific
Under the corporate motto "Joy and Fun," all
HORIBARIANs understand the nature of ESG/SDGs
investment and realize growth of each business.
© 2019 HORIBA, Ltd. All rights reserved.

[Basic Policy]
We contribute to realizing the sustainable
society advocated by SDGs* by offering
analyze and measurement technologies
which lead technology innovation that
supports security, safety, and health forpeople while contributing to global
environmental conservation.

HORIBA supports ESG investment and SDGs
to be active globally and strives to disclose
clear information.
*SDGs: “Sustainable Development Goals”, unanimously adopted

by the United Nations General Assembly in 201585

Symbol for MLMAP2023: Hawk

Find the targets from a heightened perspective
Accomplish the objectives at the fastest speed© 2019 HORIBA, Ltd. All rights reserved.

86© 2019 HORIBA, Ltd. All rights reserved.

87

References© 2019 HORIBA, Ltd. All rights reserved.

88

Numerical targets (vs 2018, vs 2019)(Billions of yen)

Sales

MLMAP2023

2018

2019

MLMAP2020

Results

Forecast

Plan

Plan

vs.2018

vs.2019

210.5

213.0

250.0

300.0

+42%

+41%

OperatingincomeOperatingincome%

28.8

25.0

30.0

40.0

+39%

+60%

13.7%

11.7%

12.0%

13.3%

-0.4p

+1.6p

Net income

22.3

17.5

20.0

30.0

+34%

+71%

EPS (Yen)

529

414

475

711

+33%

+70%

ROE

14.3%

10.5% 10% or more 10% or more--

© 2019 HORIBA, Ltd. All rights reserved.

89

Numerical targets (by Segment)(Billions of yen)

Sales

Operating income

20182019 MLMAP2020 MLMAP2023 vs.
Results Forecast
Plan
Plan
2018

vs.
2019

2018
2019 MLMAP2020 MLMAP2023
Results Forecast
Plan
Plan

vs.
2018

vs.
2019

Auto

79.6

85.0

100.0

120.0 +51% +41%

7.7

8.0

10.0

12.0

+56% +50%

P&E

19.3

20.0

25.0

28.0 +45% +40%

2.0

2.0

2.5

2.8

+38% +40%

Medical

26.0

28.0

40.0

40.0 +54% +43%

1.8

2.0

4.0

4.0 +119% +100%

Semi

57.7

50.0

50.0

77.0 +33% +54%

17.0

12.0

10.0

Scientific

27.7

30.0

35.0

35.0 +26% +17%

0.2

1.0

3.5

210.5 213.0

250.0

300.0 +42% +41%

28.8

25.0

30.0

Total

© 2019 HORIBA, Ltd. All rights reserved.

17.7+4% +48%

3.5 +1,483% +250%
40.0+39% +60%

90

Transition of Symbol© 2019 HORIBA, Ltd. All rights reserved.

91Thank youCảm ơn감사합니다

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