15th CLSA Japan Forum 2019
HORIBA, Ltd.
May 21, 2019
© 2019 HORIBA, Ltd. All rights reserved.

1

Key topics
1. HORIBA’s action to response to Electrification
2. Contribution for the energy industry as a whole

Providing effective energy solutions to meet “Well-to-wheel”

3. Semiconductor market trend
4. Anniversary of Foundation


65th anniversary of HORIBA, Ltd.



200 year anniversary of Jobin Yvon in France

5. Management change in 2018

6. Approach to ESG investment© 2019 HORIBA, Ltd. All rights reserved.

2

HORIBA, Ltd. 65th Anniversary of Foundation in 2018
Global growth through M&A
In 1996, ABX S.A. was acquired in France(now HORIBA ABX SAS)In 1997, Jobin Yvon S.A. was acquired in France(now HORIBA FRANCE SAS)© 2019 HORIBA, Ltd. All rights reserved.

In 2005, MCT (Mechatronics) Business ofCarl Scheck AG was acquired in Germany

In 2018, FuelCon AG. was acquired in Germany(now HORIBA FuelCon GmbH)In 2015, MIRA Ltd. was acquired in the U.K.
(now HORIBA MIRA Limited)3

Jobin Yvon 200th Anniversary of Foundation in 2019

© 2019 HORIBA, Ltd. All rights reserved.

4

Product at the Time of Its Startup

HORIBA

Jobin Yvon

pH Meters

Fresnel Lens fora Lighthouse© 2019 HORIBA, Ltd. All rights reserved.

5

Contents
2018 Results
2019 Forecast
Business Segments Outline
Share Holder ReturnOther Topics
Financial Data
Corporate profile© 2019 HORIBA, Ltd. All rights reserved.

6

Contents
2018 Results
2019 Forecast
Business Segments Outline
Share Holder ReturnOther Topics
Financial Data
Corporate profile© 2019 HORIBA, Ltd. All rights reserved.

7

Review of 2018
External
Events Overheated US-China trade friction
 Intensified Brexit uncertainties
 Tighter automotive emission regulations and electrification trend
 Slowdown in capital spending for semiconductors from thesecond half of 2018

Internal
Events New Management of HORIBA Group started
 Enhanced North American bases (for Semiconductors andScientific)
 Expanded the Aso factory (for Semiconductors)
 Invested aggressively in battery test technologies, including M&A
 Exceeded ¥200bn in annual sales for the first time

© 2019 HORIBA, Ltd. All rights reserved.

8

Summary of 2018 Results
Achieved record-highs in sales, profit and dividend

P&LIncrease in sales and profit in Automotive and Semiconductor segments,
year-on-yearSemiconductor sales were weak in the second half of the year due tochanges in market conditions

B/STotal asset were ¥278.1bn, up ¥12.2bn, due to increase in inventory.
Short-term loans payable were ¥12.0bn, up ¥3.6bn, mainly due toacquisition of FuelCon AG
Equity ratio: 58.0% (+1.5bp)(Compared to the end of Dec. 2017)
Operating CF: Cash in ¥19.5bn due to growth in profit

CFInvesting CF: Cash out ¥11.0bn due to capital spending

Free CF+¥8.5bn

Financial CF: Cash out ¥3.2bn due to payment of dividend© 2019 HORIBA, Ltd. All rights reserved.

9

2018 Results(Billons of Yen)

2018

2017
: Record-highResults

Forecast(as of Feb.13)

Forecast(as of Nov.9)

207.0

vs
Forecast(as of Feb.13)(as of Nov.9)

+15.1

+0.5

+3.5

+2.0

-0.1

+1.3

-0.0p

-0.1p

+0.4p

28.4

+1.7

-0.0

+1.4

16.2

19.0

20.0

22.3

+6.0

+3.3

+2.3

112.16126.70110.00130.00110.00130.00110.44130.35

-1.72

+0.44

+0.44

+3.65

+0.35

+0.35

195.3

210.0

Operating Profit

26.8

29.0

O. P. %

13.7%

13.8%

Ordinary Profit

26.6

Net Income attributableto Owners of Parent

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

vs
Forecast

210.5
27.5
28.8
13.3% 13.7%
26.9
28.3

Sales

EUR / JPY

Results

vs
2017

10

2018 Results by Segment(Billons of Yen)

Operating Profit

Sales
2018

2017

: Record-hjgh

Forecast
Results Forecast(as of Nov. 13)(as of Feb. 13)

Results

2018

2017
vs
2017

vs
vs
Forecast Forecast(as of Feb.13)(as of Nov.9)

Forecast
Results Forecast(as of Nov. 13)(as of Feb. 13)

Results

vs
2017

vs
vs
Forecast Forecast(as of Feb.13)(as of Nov.9)

Auto

73.3

79.0

78.0

79.6

+6.2

+0.6

+1.6

7.6

8.0

6.5

7.7

0.0

-0.2

1.2

P&E

17.4

19.0

19.0

19.3

+1.9

+0.3

+0.3

1.0

1.4

1.4

2.0

0.9

0.6

0.6

Medical

25.1

26.0

26.0

26.0

+8.0

+0.0

+0.0

1.9

2.0

2.0

1.8

0.0

-0.1

-0.1

Semi

53.3

58.0

56.0

57.7

+4.4

-0.2

+1.7

15.6

17.0

17.0

17.0

1.4

0.0

0.0

Scientific

26.1

28.0

28.0

27.7

+1.6

-0.2

-0.2

0.4

0.6

0.6

0.2

-0.2

-0.3

-0.3

Total

195.3 210.0 207.0

210.5

+15.1

+0.5

+3.5

26.8

29.0

27.5

28.8

2.0

-0.1

1.3

© 2019 HORIBA, Ltd. All rights reserved.

11

Contents
2018 Results
2019 Forecast
Business Segments Outline
Share Holder ReturnOther Topics
Financial Data
Corporate profile© 2019 HORIBA, Ltd. All rights reserved.

12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
Temporary subdued capital spending by semiconductor manufacturers
Anticipate a pick-up in investment, on the back 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
13

Exchange rate

(Yen)

2017

2018

2019

Results

Results

Forecast

USD

112.16110.44

110

-0.44

EUR

126.70130.35125-5.35

vs 2018

1 yen O.P. sensitivity for 2019 Forecast (Yen appreciation)
USD -243 million yen
EUR -12 million yen© 2019 HORIBA, Ltd. All rights reserved.

14

2019 Forecast: Record-high(Billons of yen)

2017

2018

Results

Results

2019
Forecast

vs 2018

Sales

195.3

210.5

218.0

+7.4

Operating Profit

26.8

28.8

29.0

+0.1

O. P. %

13.7%

13.7%

13.3%

-0.4p

Ordinary Profit

26.6

28.3

28.5

+0.1

Net Income attribute to
Owners of Parent

16.2

22.3

20.0

-2.3

386
11.5%

529
14.3%

474

-55

11.9%

-2.4p

Net profit per share (Yen)ROE© 2019 HORIBA, Ltd. All rights reserved.

15

2019 Forecast by Segment(Billons of yen)Sales
: Record-high2018
Results

2019
Forecast

Operating Profit
vs
2018

2018

2019

Results

Forecast

vs
2018

Auto

79.6

85.0

+5.3

7.7

9.0

+1.2

P&E

19.3

20.0

+0.6

2.0

2.0

-0.0

Medical

26.0

28.0

+1.9

1.8

2.0

+0.1

Semi

57.7

55.0

-2.7

17.0

15.0

-2.0

Scientific

27.7

30.0

+2.2

0.2

1.0

+0.7

Total

210.5

218.0

+7.4

28.8

29.0

+1.0

© 2019 HORIBA, Ltd. All rights reserved.

16

Contents
2018 Results
2019 Forecast
Business Segments Outline
Share Holder ReturnOther Topics
Financial Data
Corporate profile© 2019 HORIBA, Ltd. All rights reserved.

17

Auto

2018 Results and 2019 Forecast

2018 Results(Billions of yen)

Automotive Sales Breakdown
EMS

MCT

ITS

ECT

73.3

＋
＋
＋

-

-

EMS
MCT※1
ECT※2

Higher demand in China and India due to new
regulations
One-off expenses, including acquisition costs
Business expansion in next-gen. automotive
technology development

1: Mechatronics

2: Engineering Consultancy & Testing

79.6

85.0

9.3
1.2
18.2

10.0
1.0
21.0

45.3

50.8

53.0

2017

2018

2019 （F)

65.4
4.2
1.6
19.7

62.2

8

7.2
1.6
13.2

1.6
18.3

39.7

40.1

2015

2016

Sales

2019 Forecast
＋

-

＋

EMS

MCT
＋ ECT

Robust sales in Asia and Europe
Increase in investment for achieving greater
competitiveness
Increase in sales in Japan and Europe
Aggressive investment to accelerate growth

Sales and Operating Profit
65.4

62.2

7.6

7.7

2017

2018

85.0

9.0

5.2
3.5
2015

© 2019 HORIBA, Ltd. All rights reserved.

73.3

79.6

O.P.

2016

2019 （F）
18

Auto

Effect of enhanced emission regulations
Status of the next-gen. emission regulations
HORIBA BIWAKO E-HARBOR achieved record-high output

 Sales of EMS business
2015(Before the start of E-HARBOR)

Production at HORIBA BIWAKO E-HARBOR

2018
Up 25%¥39.8bn(forecast)¥49.0bn Emission regulations
Regulation
EU
Japan
WLTP1
Oct. 2018
Sep. 20172
RDE
2022 (plan)
China and India: Adoption of new regulations in 2020 (plan)(Same level as Euro6)
1: Worldwide harmonized Light vehicles Test Procedure
2: Real Driving Emissions© 2019 HORIBA, Ltd. All rights reserved.

19

Auto

Investment plan for a battery evaluation testing facility

Introducing an advanced evaluation concept to connect the real and the virtualJapan

Battery evaluation testing facility for electricvehicles(HORIBA BIWAKO E-HARBOR) Assessment of the combination of a battery, powertrain,
and a vehicle
 Testing a wide range of temperature environment
 To be used in evaluating xEV and fuel batteries
 Operation to start in July 2019 (plan) Investment amount: about ¥1.3bn

UK

Advanced Battery Development Suite (ABDS)(HORIBA MIRA)HORIBA MIRA’s
engineering
capability to be
deployed globally© 2019 HORIBA, Ltd. All rights reserved.

20

Auto

Expanding Business Domains (FuelCon Acquisition)
Acquisition of FuelCon AG A leading German developer of fuel celland battery test systems for electricvehicles Owns diverse fuel cell test systems
 Supplied systems mainly to German
automakers

Sales Breakdown

Established

2001

Sales

11,504k EUR (2017)

Operating profit

199k EUR (2017)

Workforce

62 (ex. Management)

Location

Magdeburg, Germany(About 160km west of Berlin)

Major customers

Volkswagen, BMW, Audi, Hyundai, Bosch

Fuel cell test
systems46%

Lithium ion
battery test
systems
54%

HORIBA Group’s expansion of business domains
Use of FuelCon’s
experience and knowhow to expand electricvehicle business© 2019 HORIBA, Ltd. All rights reserved.

21

Auto

More solutions, addressing electrification challenges

Acquisition of FuelCon AG (Germany)
to strengthen battery test business 【September 2018】

HORIBA BIWAKO E-HARBOR Cell Zero

【Main business】
Development and production offuel cell and battery test systems
for electric vehicles【Major customers】①
Battery module/pack test system

Volkswagen, BMW, Audi,
Hyundai, Bosch, etc.
【Sales breakdown】
Battery test systems: 23％
Fuel cell test systems: 77％

Battery emulation system*Results of the 4th Quarter, 2018

Accelerate business growthin electric vehicle
development© 2019 HORIBA, Ltd. All rights reserved.

Open an advanced lab
for vehicle electrification

自動運転車のサイバー攻撃に対する安全対策②
複数車両による高速自動走行など
試験・評価【Planned start, July 2019】1) Cell 0: Adopting technologies of FuelCon and MIRA
2) Cell 1-3: Powertrain and vehicle test systems (in operation)

Battery production line test system

Enabling total powertrain simulation→ Completing HORIBA’s unique evaluationand test facility
22

Auto

Expanding Business Domains (Support to the UCI)
Support to the UCI for a new institute Committed support to the University of California, Irvine (UCI) to establish the Horiba Institute for
Mobility and Connectivity (HIMAC)
 Enhance industry and academia partnering in the energy sector of the UCI, a credible instituterecognized by the Environmental Protection Agency (EPA) and other U.S. regulatory authorities
HORIBA Group’s expansion of business domains

Mobility field

Provision of measurement instruments【HIMAC】
Combine energy and mobility fields

Integration
Research and education efforts on
integrated systems

Energy field© 2019 HORIBA, Ltd. All rights reserved.

A place for research and education

23

Auto

Industry-academia tie-up to respondto change in the automotive industry

Contributing to boosting efficiency inthe accelerated simulation-based
automotive development
 Improve development of test equipment allowing
to verify effects before making prototypes
Technische Universität
Dresden (Germany)
Collaboration in test equipment development

Invest in andprovide (rent) test
equipment© 2019 HORIBA, Ltd. All rights reserved.

Provide academic
know-how

Promoting development of connected/autonomous driving technology
 Ensure safety against cyber attacks
 Test/evaluate high-speed autonomous drivingof more than one vehicle
Coventry
University (UK)
Launch of a new autonomous
driving test facility (in 2020)

Invest in andprovide test
equipment

Provide academic
know-howRendering

24

P&E

2018 Results and 2019 Forecast(Billions of yen)Supplied water quality analyzers(tap water) to Kuala Lumpur

2018 Results【Stack gas analyzers / Process measurement equipment】
Sales increase in North America by sales efforts＋ 【Air quality monitoring】
Demand growth in emerging countries due to enhanced
regulations＋ 【Water quality monitoring】
Sales increase due to business growth in Asia＋

2019 Forecast

Received
repeatorders in
2019【Stack gas analyzers / Air quality monitoring】
Anticipate recovery in Japan and tighter regulations in Asia
＋ 【Process measurement equipment】
Anticipate continued recovery in investment by customers＋ 【Water quality monitoring】
Expand more business growth in emerging countries＋-© 2019 HORIBA, Ltd. All rights reserved.

Sales
O.P.

Sales and Operating Profit
16.7

1.7

16.7

17.4

19.3

20.0

2.0

2.0

2018

2019 （F）

1.5
1.0

2015

2016

2017

25

P&E

Promote localization for business expansion

Localization according to trends in developed/emerging markets yields good results
HORIBA Group’s mainbases in the P&E segment
Stack gas analyzer【India】
Enhance engineering
Demand increase forstack gas analyzers;
local production andsales【Germany】【USA】

Enhancemanufacturing/sales
Record shipment ofpollution measurement
units in Europe

Enhancesales/product dev’t
Greater enhanced
process measurement
equipment business【China, Asia】
Promote dev’t/
engineering; enhancesales
Tighter environmental
regulations raised
need formeasurement
equipment【Water quality
measurement】
Automatic total nitrogen,phosphorous measurement equipment

Systemization of
measurement equipment in
oil refining process andbundle sales

Aim at solidifying HORIBA’s position in global business© 2019 HORIBA, Ltd. All rights reserved.

26

Medical 2018 Results and 2019 Forecast
2018 Results＋＋

Latest test system

Strong sales of hematology analyzers in China
and India- Increase in R&D expenses for achieving greater

competitiveness＋Acquisition of a micro-blood analysis systembusiness to expand the product line-up

Solution

Operation of the large-scale(Launched in 2017)
testing centers in the UK
and Brazil (Photo from Brazil)

2019 Forecast＋＋(Billions of yen)-

Aim at growth in sales by promoting new products toachieve greater results despite intensified competition inhematology and CRP analyzers in Japan

Sales and Operating Profit
27.6

2.5

26.5

© 2019 HORIBA, Ltd. All rights reserved.

O.P.

28.0

25.1

26.0

1.9

1.8

2.0

2017

2018

2019 （Ｆ）

2.8

Increase in R&D expenses for business expansion (i.e.,
micro-blood analysis system business)
2015

Sales

2016

27

Medical Initiatives for business expansion
New products to be launched globally
Mid and large-sized
new product“HELO Solution”
Completed installationin France, Brazil, Thailand
and the U.K.

Installation case in Brazil

Opened the application center (biochemical)
to accelerate the U.S. business To start full operation in August 2018
in Irvine, California
 For application development in thebiochemical field Biochemical business consolidated sales:¥4.1bn(2017)5 diff. white cell diagnosis + CRP“Yumizen H630”
Favorable sales to doctors in private
practice in Japan

Business alliance with Siemens Healthcare Diagnostics
In the process of arranging products for obtaining
accreditation© 2019 HORIBA, Ltd. All rights reserved.

Biochemical analytical equipment to be launched in
the U.S. (OEM supply from JEOL Ltd.)
28

Medical Broaden technologies and product functions
Acquisition of a micro-blood analysis systembusiness from Rohm Co., Ltd.
【Main business】【Technology characteristics 】
Enable offering of compact products thatmeasure CRP2 and HbA1c3 at low cost

Development of μTAS1
technology, which uses microprocessing technology ofelectronic components[Business evolution by test category]

1: Micro Total Analysis System
2: C-Reactive Protein, a representative inflammatory marker
3: Hemoglobin A1c that indicates blood-sugar levels of the past
1-2 months

Test Category

ClinicalChemistry

Hematology

Immunology

Coagulation

Market size

2tn yen350bn yen

2tn yen200bn yen

Private practioners

Clinicalchemistry

Hospitals

Large hospitals
Testing centers
Small andmedium-sized
hospitals

Small/medium-sizedCRP
hematology
analyzers

Expand a line-up in the POCT category (focus on clinical-chemical and immunology)© 2019 HORIBA, Ltd. All rights reserved.

HORIBA’s hematology analyzers
have additional function of Malaria
infection screening
 Reduction in test processes inmalaria infection testing Cheaper than purchase of new
equipment

Small/
mediumsizedcoagulation

Hospital units andsurgery rooms (POCT)

Broader portfolio

Broader functions of products
help solve social challenges

Higher shares in tests in hospitals market(Market sizes by HORIBA’s estimates)

SDGs advocate eliminating malaria.

Fight Malaria

Grow business
29

Semi

2018 Results and 2019 Forecast

2018 Results＋

Record-high sales and operating profit

Boosted supply and enhanced development＋ capability by the Aso factory expansion and openingof HORIBA Reno Technology Center (USA)-(Billions of yen)

HORIBA STEC’s 45th anniversary
Launched Japan’s first mass flow
controllers in 1980
Grew to achieve a global high 60%* share

Slowdown in the second half due to semiconductor
makers’ temporary investment adjustment* HORIBA’s estimate for 20192019 Forecast＋

Expect semiconductor makers’ investment to be in an
adjustment phase in the first half but to pick up in thesecond half due to mid- to long-term solid demand© 2019 HORIBA, Ltd. All rights reserved.

Sales and Operating Profit

Sales
O.P.

35.3

53.3

57.7

15.6

17.0

2017

2018

55.0

38.8

9.4

9.6

2015

2016

15.0
2019 (F)30

Semi

Strengthen supply capacity and global R&D

Full-fledged production after the Aso expansion

Opening of HORIBA Reno Technology Center

Combined output at Aso and Kyoto
350,000 MFCs per year

Enhance a N. America development base in the focus area

Production status: Record-high output (March 2018)
Aso Factory: Mass production of MFCs
Kyoto Factory: Development and production ofadvanced MFCs

Start: Aug. 2018 Investment: App. ¥1.2bn
Place: Reno, Nevada, the U.S.
Activity: Development in fluid measurement and control
technologies
Reno Technology Center’s surroundings

Expanded area

HORIBA STEC Aso Factory

Construction completion
ceremony (May 2018)

Japan

Establish a global R&D capability

Relocate into the semiconductor industry
cluster region
1. Deepen relationship with customers
2. Promptly capture needs
3. Incorporate into products

Reno Tech Center
Semi/battery makers

USA

HORIBA’s semicon bases
SPE makers

HORIBA’s global MFC market share: About 60% (HORIBA’s estimate; as of 2018)© 2019 HORIBA, Ltd. All rights reserved.

31

Semi

Expand business to cover the entire
semiconductor manufacturing process

Diverse product line-up contributing to the overall semicon manufacturing process
Material assessment

Raman spectrometer(next-gen. semicon material
assessment)

Manufacturing process

Mass flow
controller(Precision
enhancement in
the etchingprocess)

Quality control and waste water treatment

Chemical concentration
monitor (high-precision
measurement of chemicals)

pH meterIndustrial water
quality analyzer(Appropriate pure water/wastewater
control within a factory)
Cathodoluminescence measurement
system (assessment ofcompound semiconductors)© 2019 HORIBA, Ltd. All rights reserved.

Reticle/mask particle detection systems(quality enhancement of exposure process)

Water-related business*Typical product example
32

Scientific 2018 Results and 2019 Forecast(Billions of yen)

New product launched in 20182018 Results

X-ray analytical microscope XGT9000＋ Sales increase in Japan and Europe on the back ofrobust corporate R&D spending＋-

Recognized expenses to enhance bases in theAmericasMore accurate defect andforeign material analysis ofproducts
Non-destructive, noncontact
Can be used in analysis of lithium ion batteries,

2019 Forecast＋ Anticipate sales increase in the Americas due to production

capacity growth＋- Expect solid demand to continue in Japan and Europe

semiconductor ICs, foods, and drugs

Sales and Operating Profit
26.7

1.1

25.7

26.1

0.4

batteries© 2019 HORIBA, Ltd. All rights reserved.

2016

O.P.

30.0

1.0

0.9

＋ Enhance actions for business expansion in secondary
2015

27.7

Sales

2017

0.2
2018

2019 （F)33

Expand core business and contribute to
Scientifictechnology innovation
Acquisition of MANTA Instruments Inc.
to obtain new technology
 Acquired this U.S. start-up company that develops,
manufactures and sells nanoparticle measurement
instrument, in January 2019.
 High reputation; has patents in related technology
MANTA Instruments, Inc.
• Located in San Diego• Established September 2014
• Six employees

ViewSizer3000
Used in life science, and forsemiconductor, drugs, foods, cosmetics,
catalysts and secondary batteries

Aim at expanding the particle measurement
instrument business© 2019 HORIBA, Ltd. All rights reserved.

Contributing to technology innovation
 Prof. Gérard Mourou, who was awarded the2018 Nobel prize in physics, has been a longtime user of HORIBA’s grating.

HORIBA’s
meter-size
grating

HORIBA’s grating was selected to be
exhibited at the Nobel Prize Museum
34

Core
analytic
technology
supports
Scientificcutting-edge progress
20 years of technological integration of HORIBA and Jobin Yvon and new market development
HORIBA celebrates 65th anniversary

HORIBA’s strengths inmeasurement instruments for industry

Jobin Yvon’s strengths inproducts for scientists and advanced research

Scientific segment
Prominent as developer of unique markets;
functioning as an incubator of HORIBA business

Automotive© 2019 HORIBA, Ltd. All rights reserved.

Process &Environmental

Medical

Semiconductor
35

Contents
2018 Results
2019 Forecast
Business Segments Outline
Share Holder ReturnOther Topics
Financial Data
Corporate profile© 2019 HORIBA, Ltd. All rights reserved.

36

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% 27.4%
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.

37

Contents
2018 Results
2019 Forecast
Business Segments Outline
Share Holder ReturnOther Topics
Financial Data
Corporate profile© 2019 HORIBA, Ltd. All rights reserved.

38

HORIBA’s perspectives on ESG investment
Contribution to the environment and society via its business;
Building of an open & fair governance structure【Examples】
Emission gas
measurement system
Contribute toPortableemission regulations,emission
realizing healthy society,measurement
preventing climate changesystemOBS-ONE

Environment-related
products
Contribute to environmental preservation andimprovement by identifying
Industrial water
causes of pollutions via
quality analyzer
analysis of air pollutants
H-1 Series
and industrial waste© 2019 HORIBA, Ltd. All rights reserved.

Outside Directors with diverse
Innovation for electrification
experiences and skills& autonomous driving
Help realize safe, pleasantsociety

MIRA Technology InstituteContribute to industries’
development by developing
next-gen. talents

Raise the quality of strategies by making
decisions upon active discussions at theBoard of Directors and corporate value
Sawako Takeuchi
Academic background as a holder of a
doctor’s degree in engineering andinternational experience

Masahiro Sugita

Aso factory’s expansion
Contribute to local communities
and continuous job creation

Deep insight and knowledge on financeand economy, and accumulated
experience as a director and auditor ofother companies

Jiko Higashifushimi
Insight as Head Priest of the Shorenin
Religious Corporation and work experienceat a financial institution
39

“HORIBA Premium Value” to improve asset efficiency
Case of an improved asset efficiency in the MCT business Improvement at Olomouc Factory (Czech) with a focus
on production of standard Chassis dynamometers Full review of production processes and supply
chain and adoption of the Kanban pull system

25% cut in production lead-timeWorkshops on adoption of a new benchmark
 Action plan for those responsible in global finance Workshops for managers
 Action plan (examples)
・Promoting the benchmark to all group employees
・Optimization of group inventory by sharing inventory
information
・Building of a sales company-factory cooperative
structure for collection of receivables© 2019 HORIBA, Ltd. All rights reserved.

Olomouc Factory (left) and its production area (right)

HORIBA Premium ValueA new management benchmark
with awareness on WACC
O.P.

Cost of capital(Invested capital X In-houserate of cost of capital)
40

Workplace-rooted Workstyle Renovation
Stained Glass Project
Step 1in 2014

 Initial focus on engagement of women at
workplace

Step 2from 2015

 Start “work style renovation” workshop
 Theme: Change in individual behavior

Step 3from 2016

 Organize a dedicated team to connect the
management, HR team and workplaces Activities to make the best use ofcharacteristics of each workplace/organization

Opened a website topresent diversityrelated initiatives
http://www.horiba.com/diversity/© 2019 HORIBA, Ltd. All rights reserved.

Introducing “Good Place” work system

Allowing flexible workstyle and aiming
at capable employees to continue
working“Good Place” work system
 Allows work other thanhome
 No limit to work-at-homedays

A guideline ismade and usedby each teamExperience of the Telework
Days* is reflected in the“Good Place” work system.
*The Japanese government’s initiative
calling to participate a nation-wide remote
working campaign on certain days
41

Awarded Nadeshiko Brands and Health & Productivity Stock Selection
Program by METI and Tokyo Stock Exchange
Activities aimed at realizing a better working environment highly evaluated from the stock market

Evaluated the engagement based on
our Diversity promotion activities"HORIBA Stained Glass Project“
METI announcement : https://www.meti.go.jp/english/press/2019/0322_003.html

Evaluated our activities based on the“Health promotion activities of mind andbody“, the policy declared by the
management
METI announcement : https://www.meti.go.jp/english/press/2019/0221_003.html© 2019 HORIBA, Ltd. All rights reserved.

42

Contents
2018 Results
2019 Forecast
Business Segments Outline
Share Holder ReturnOther Topics
Financial Data
Corporate profile© 2019 HORIBA, Ltd. All rights reserved.

43

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

2017

2018

Jan. – Dec.

Jan. - Dec.

Increase
Sales

26.8

+14.5
Increase
Gross Profit

Increase
Cost of
Goods
sales

Exchange
Impact for
grossProfit

-7.9

-0.02

+6.6

Exchange
Impact for
Expenses-0.1

Increase
R&D Cost-1.1

Increase
Other
Expense

28.8

-3.3

Exchange Impact -0.1 Increase Expenses -4.4

Increase of Operating Profit +2.0
© 2019 HORIBA, Ltd. All rights reserved.

44

Impact of Fluctuation in Foreign exchange

Exchange rate impact
for 2019 Forecast

Exchange rate impact (2018 result)
Sales +¥579mn O.P. -¥182mn
Sales

Auto
P&E
Medical
Semi
Scientific
Total

Total
+581
+5
+117
-228
+104
+579

USD

1 yen impact of Sales and O.P.
(Yen appreciation)

Operating Profit
EUR

-177

+586

-55

+63

-62

+298

-367

+27

-156

+249

-817 +1,223

Total
-11
+29
+8
-228
+19
-182

USD

EUR

-41

+56

+2

+27

+2

-4

-338

+19

-8

+16

-383

+114

USD
EUR

© 2019 HORIBA, Ltd. All rights reserved.

2017

2018

2019

ResultResultForecast

112.16126.70110.44130.35

Sales-¥489mn-¥373mn

Operating Profit
USD-¥243mn
EUR-¥12mn※Total is not matching with sum-up of each content due to othersmall currency effect.

(JPY)
USD
EUR

(Millions of yen)

110.00125.0045

Capital Investment, Depreciation, R&D
2018

2017

ResultPrevious
Forecast

Result(as of Nov 9)

15.5

10.2
7.2
15.1

7.5%

7.2%

Capital Investment

11.6

14.0

Depreciation

7.5

7.5

R&D

13.9
7.1%

(To Net Sales)

-PP&E
2018
Topics2019
Topics-Depreciation
-R&D
-PP&E
-Depreciation-R&D© 2019 HORIBA, Ltd. All rights reserved.

(Billions of yen)

2019
vs
2017

vs
Previous
Forecast

Forecast

vs
2018

+5.7

-0.3

16.0
7.5
16.0

-0.3%

7.3%

0.1%

-1.3

-3.7

-0.2

-0.2

+1.2
0.1%

+0.2
+0.8

Enhancement of North American bases / Investment to MIRA /Enhancement of global bases
Decrease goodwill of MIRA, + Increase by new investment
Increase in Automotive segment
Increase in investment in automotive-related facilities and enhancementof global bases
Increase by new investment
Increase in Automotive and Semiconductor segments
46

Consolidated Cash Flows(Billions of yen)

2018

2017

Variation

Cash flows from operating activities

+19.5

+28.2

-8.7

Cash flows from investing activities

-11.0

-13.1

+2.1

Cash flows from financing activities

-3.2

-9.0

+5.8

Cash and cash equivalents at end of year

+62.8

+58.3

+4.5

Free cash flows

+8.5

+15.1

-6.6

© 2019 HORIBA, Ltd. All rights reserved.

47

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

Total Loan Balance
46.7

44.0

44.7

Cash*1
47.8

Bonds
15.0
Long
16.8
Short
12.8

2015
242％
56％

42.0
Cash*1
51.9

Bonds
15.0

Long
19.2
Short
12.4

2016
237％
55％

Cash*1
58.3

Bonds
15.0

Cash*1
62.8

Bonds
15.0

Long
18.7

Long
17.0

Short 8.3

Short
12.0

2017
239％
57％

2018
246％
58％

Bond
redemption
In 2020
Borrowedfrom JBIC*2¥15.1bn

Current ratio
Capital ratio- Loan repayment due to group financing- Recent issuer rating : R&I “A” (Sep. 2018), JCR “A”(Aug. 2018)*1 Cash*…Cash and Cash Equivalents at End of Period. *2 JBIC: Japan Bank for International Cooperation© 2019 HORIBA, Ltd. All rights reserved.

48

Contents
2018 Results
2019 Forecast
Business Segments Outline
Share Holder ReturnOther Topics
Financial Data
Corporate profile© 2019 HORIBA, Ltd. All rights reserved.

49

Business Segments
Sales Breakdown by Segment
Automotive Test Systems

Sales: ¥210.5bn (1,897MUND)
13%
ScientificProcess & Environmental

27.7
(250)

79.6
(717)

Semicon
Medical27%

Automotive

57.7
(520)

38%

Medical P&E
Semiconductor

26.0
(234)

12%
Scientific

19.3
(174)

10%

( ) =Segment Sales in MUSD
% = Segment Sales Ratio© 2019 HORIBA, Ltd. All rights reserved.

(Sales of FY2018)50

HORIBA Worldwide
Sales of FY2018 : ¥210.5bn(1,897 MUSD)

Sales Ratio by Region
EU
22%

Japan
31%

Americas16%© 2019 HORIBA, Ltd. All rights reserved.

Asia
31%

The Number of Group Companies by region(As of December 31, 2018)
Americas
Europe
Asia
Total

9
22
18 (4 in Japan, including HORIBA, Ltd.)
49
51

Employees by Region
Americas
2%

Other Europe

2%

The U.S.

7,943

10%

Total Asia : 4,315

Germany

9%
The U.K.

Total Number of Employees

Japan

Japan
38%
38%

10%

55%
Total Europe： 2,637

33%

France

12%

Other
Asia
14%
17%

Total Americas： 991

12%(As of December 31, 2018)© 2019 HORIBA, Ltd. All rights reserved.

52

[Ref.] Business results trend for 20years/Targets/Progress of MLMAP(Billons of yen)

Continuous growth in Sales/Operating Profit/Net Income
Growth in two times for 10 years from 2010

250.0

Sales
20152020

CAGR:7.8%
Sales

Operating Profit

210.5

Net Income

195.3
171.9 170.0 26.8

144.2
105.6
74.4

78.5

2.5
0.7

11.2

138.1

134.2

16.5

11.7

118.5 123.4 117.6
104.5

12.2

10.9

6.8

14.9
11.7

3.5

6.4

6.5

8.6
6.0

20.1
17.2

CAGR:8.3%
Net Income
20152020

18.4
22.3

13.7

20.0 20.0

CAGR:8.5%

16.2
13.2 12.9

5.1

2.0

Operating Profit
30.0
29.0
28.8
20152020

153.0

92.4

9.3
5.4

-1.0

85.0

116.0

218.0

7.9

8.6

7.3

8.9

10.5

3.1

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
(New Standards)

2001-2005© 2019 HORIBA, Ltd. All rights reserved.

2006-20102011-2015(Fore.) (Plan)

2016-2020
53

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

54

Biwako factory “HORIBA BIWAKO E-HARBOR”
 Consolidating development, design, and production operations of 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.

55

Business impact from next emission regulations
Global convergence of emission regulations
 Accelerating introduction of unified emission regulations (US and EU in 2017, Japan in 2018)
 Need to upgrade equipment due to change in testing method

 Bench test in labs
 Need to upgrade exhaust gas analyzers (hardware and software) Demand for more number of units On-road test (RDE: Real Driving Emission)
 Regulation for Light Duty Vehicles to start in Sep. 2017 in EU
 Need to coordinate data with lab test results• Correlate analyzers＝Coordinate ”MEXA” with ”OBS” series• Expand HORIBA MIRA’s testing business© 2019 HORIBA, Ltd. All rights reserved.

PEMS(Portable Emission Measurement Systems)
56Response to Automotive Electrification
CELL0(Zero)

CELL1

CELL2

CELL3

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

57

HORIBA MIRA

Information on page 59 to 68 are as of acquired the company.
© 2019 HORIBA, Ltd. All rights reserved.

58

Overview of MIRA Ltd.
Business

1. Engineering Consultancy
2. Testing Services & Consultancy
3. MIRA Technology Park (Lease R&D facilities)
Results
Sales : 46.1MGBP(2014 Results)
O.P. : 1.1MGBP(2014 Results)
Employees 518 (As of December 31, 2014)
Established 1946
Head office Nuneaton, Warwickshire, UK
Main sites
UK, China, India, Brazil© 2019 HORIBA, Ltd. All rights reserved.

59

Core business streams
Engineering Consultancy
 Sales:20MGBP Number of employee:240
 Design and development for vehicle driving performance(Brake performance, electromagnetic compatibility performance)
 Development services utilizing automatic driving and remote control technology

Testing Services & Consultancy
 Sales:22MGBP Number of employee:180
 Testing and homologation services for collision safety, electromagnetic compatibility, functional safety and othervehicle related performance MIRA has the capability for a range of type approval testing, delegated by public authority

MIRA Technology Park (Lease R&D facilities)
 Sales:3MGBP

Number of employee:20

 Rent R&D facilities to 30 Auto/Auto related company
 Granted Enterprise Zone* status by the UK government© 2019 HORIBA, Ltd. All rights reserved.

* Enterprise Zones
A Companies in Enterprise Zones
have access to a number of benefits,
including tax concessions and grants60

2014 Results
Sales by Business field
OthersMIRA Technology Park
3MGBP
6%

Testing Services& Consultancy
22MGBP
49%

Engineering
Consultancy
20MGBP
44%

Sales by Region
Americas
3%
China
5%
Europe
8%

India
1%

Other
Asia
1%

Korea
2%

UK
80%

Total Sales:46.1MGBP© 2019 HORIBA, Ltd. All rights reserved.

61

Engineering Consultancy
It could cover all domains of Vehicle R&D

Vehicle Engineering

Controls & Next generation EV© 2019 HORIBA, Ltd. All rights reserved.

Functional Safety

Future Transport Technologies

62

MIRA Technology Park
Various experiments using a large test course

MIRA Technology Park
30 customers

1km
Proving ground
Test Site“35” Test Site
Wind Tunnels(3)/EMC(9)/Crash
lab/NVH Chassis/Battery test

© 2019 HORIBA, Ltd. All rights reserved.

• Performance(4.5km)• Off road
• Wet surface• City Circuit• Noise-Generating• Ride & Durability
Transmission test
Braking systems
Tire development
Durability

63

MIRA Technology ParkKey Aspects:
 Renting space to customers who want to be on site,ranging from day rates for workshop units to long termleases for bespoke dedicated R&D facilities
 Total number of tenants:30
 Locations: UK

Key Customers & Markets:
 Major OEM’s and Tier One suppliers from around theworld Tenants are attracted from global companies that wantto access European technology and the European
transportation market© 2019 HORIBA, Ltd. All rights reserved.

64

Location of MIRA MIRA was strategically located in the

Midlands, the center of the UK automotive
industry
This area is famous for advanced vehicle
engineering incl. F1 teams, and manyskilled resource (Mercedes, McLaren, Lotus,

Auto makerF1 teamWilliams etc.)

 Independent from any automotive
manufacturers
 Strong support from UK and local
government

Major customers :Aston Martin, Ford, Jaguar Land
Rover, HKMC (Hyundai Kia Motor
Company) and Japan Auto maker© 2019 HORIBA, Ltd. All rights reserved.

65

Future vision of HORIBA, Ltd. and HORIBA MIRA Ltd.
Shared Vision: Contribute to Global Sustainable Mobility
Challenges
currently faced
Access to latest vehicle technology
and R&D information
Become ready for changing
powertrain and future mobility

Grow in the global market
Maximize use of key technologies,
facilities, and human resources

Synergy
Short term

Short term

Create added value in EMS/MCT business

Utilize HORIBA’s advanced measurement devices
so as to benefit each business

Enhance software development and accumulate
R&D-related information

Long termLong term

Expand the Automotive business domain

Grow in the global market

Develop next-generation mobility systems

Expand the customer base© 2019 HORIBA, Ltd. All rights reserved.

66

Expand business portfolio
Provide comprehensive solution of Automotive R&D
Ems
Cert.

Engine
R&D

PWT*
R&D

Vehicle
R&D

Tools

Ems
Cert.

(EMS/MCT)Engine
R&D

PWT
R&D

VehicleR&D

Process(Software)

Tools(EMS/MCT)Engineering
Consulting

Process(Software)

Ems
Cert.

Engine
R&D

PWT
R&D

VehicleR&D

EngineeringﾞConsultingﾞTools(EMS/MCT)

Process(Software)

Engineering
Consulting© 2019 HORIBA, Ltd. All rights reserved.

*PWT: Powertrain
67

HORIBA’s analytical and measurement technologies
contribute to the entire energy industry
Energy production

Transportation and storage

Consumption and environment

Electric vehicles, etc.

Power production

Hydrogen storage,
fuel cell vehicles, etc.

Stack gasanalyzers

Smart houses

EngineEmissionmeasurement
systems

Four-wheel drive
test systems, etc.

Fuel Cell
testsystems© 2019 HORIBA, Ltd. All rights reserved.

Lithium-ion battery

Gasoline,hybridvehiclesAir quality monitoring
systems, etc.

Raman spectrometers, etc.

Offices and factories
68© 2019 HORIBA, Ltd. All rights reserved.

69

Thank youCảm ơn감사합니다

ありがとうございましたDziękuję

Grazieधन्यवाद

Merci谢谢ขอบคุณคร ับநன்றObrigadoΣας ευχαριστούμε

Tack ska ni haБольшое спасибо

Danke© 2019 HORIBA, Ltd. All rights reserved.

Gracias70