Financial Results for the 1st‐Half of the Fiscal
Year Ending March 31, 2021
November 18, 2020
This presentation contains forward‐looking statements relating to expected
future performance as of November 18, 2020. Such statements are based on
the views and assumptions of company management and involve risks anduncertainties such as changes in the business environment that may cause theactual results to differ materially from expectations.
Copyright © 2020 Harmonic Drive Systems Inc.

1

Performance Summaryfor 1H FY03/21

2
Copyright © 2020 Harmonic Drive Systems Inc.

Consolidated results for 1H FY03/21(versus original forecasts)(millions of yen)
Forecasts(announced Aug 7, 2020)

1H FY03/21 (actual)

Vs. original forecasts

AmountPercent (%)

AmountPercent (%)

ChangeRate (%)

Net sales

17,300100.0

17,702

100.0

402

2.3

Operatingincome

(600)

－

(81)

－

518

－

Ordinaryincome

(650)

－

216

1.2866－

Net income

(550)

－

115

0.7665－

EPS (yen)(5.71)

－

1.20

－

6.91

－

Net income (loss) refers to net income (loss) attributable to owners of parent.

3
Copyright © 2020 Harmonic Drive Systems Inc.

Consolidated results for 1H FY03/21(year‐on‐year change)
1H FY03/20
Amount(millions of yen)

1H FY03/21

Percent (%)

AmountYear‐on‐year change

Percent (%)

ChangeRate (%)

Net sales

21,577100.0

17,702100.0(3,874)(18.0)

OperatingincomeOrdinary
income

1,383

6.4

(81)

－

(1,464)

－

1,613

7.5

216

1.2(1,396)(86.6)Net income

280

1.3

115

0.7(164)(58.8)EPS (yen)

2.91

－

1.20－

(1.71)(58.8)

Capitalinvestment

5,779－

835－(4,943)(85.5)

Depreciation

3,635－

3,490－

(145)

(4.0)

R&D
expenses

1,166－

1,174－

80.7

Net income (loss) refers to net income (loss) attributable to owners of parent.
Depreciation includes depreciation of tangible assets and amortization of intangible assets and goodwill.

4Copyright © 2020 Harmonic Drive Systems Inc.

Performance of main group companies in 1H FY03/21(millions of yen)

Equitystake
Harmonic Drive Systems
Inc.

－Net sales

Net income

AmountYear‐on‐yearchange (%)

AmountYear‐on‐yearchange (%)

10,041

(4.6)

388

53.2

HD Systems, Inc.
(Harmonic Drive L.L.C.)(U.S.A)

100%(51%)

2,681(25.7)

105(67.2)

Harmonic AD, Inc.

100%776(19.7)

(5)

－*3

Harmonic Drive Systems(Shanghai) Co., Ltd.

100%

1,358(42.6)

118(40.4)*4*6

Harmonic Drive SE(Germany)

74.7%

5,439(26.6)

279(51.5)*2*5*1 For overseas subsidiaries, the fiscal year ends December 31.
*2 Exchange rates: Jan–Jun 2019 1USD = ¥110.05, Jan–Jun 2020 1USD = ¥108.27*3 Exchange rates: Jan–Jun 2019 1CNY = ¥16.20, Jan–Jun 2020 1CNY = ¥15.39*4 Exchange rates: Jan–Jun 2019 1EUR = ¥124.32, Jan–Jun 2020 1EUR = ¥119.30*5 Net income (loss) of US subsidiaries (consolidated) is after excluding non‐controlling interests.
*6 The figures for Harmonic Drive SE are on a consolidated basis, including results of its subsidiaries; net income is before excluding non‐controlling interests

5Copyright © 2020 Harmonic Drive Systems Inc.

Non‐consolidated results for 1H FY03/21(year‐on‐year change)(millions of yen)

Year‐on‐year change

1H FY03/21

1H FY03/20
AmountPercent (%)

AmountPercent (%)

ChangeRate (%)

Net sales

10,527100.0

10,041100.0(485)(4.6)

OperatingincomeOrdinary
income

354

3.4

416

4.1

62

17.5

679

6.5

537

5.4(141)(20.9)Net income

253

2.4

388

3.9

135

53.2

EPS (yen)

2.64－

4.04－

1.40

53.2

Capitalinvestment

3,651－

257－(3,393)(92.9)

Depreciation

1,551－

1,404－

(147)

(9.5)

R&D
expenses

841－

844－

3

0.4
6

Copyright © 2020 Harmonic Drive Systems Inc.

Non‐consolidated net sales by application (half‐yearly)(millions of yen)

25,22924,02025,00021,048

3,300

3,309

449

20,00017,9342,575
318

2,230
15,000

475

1,320
1,210

1,314
1,204

1,137
1,076

203
887
968

10,527

12,941
10,00013,326

11,457
9,890

5,000

0

1,768

1,165
1,797

1,431
2,237

3,341

1,044
2,455

1H

2H

1H

2H

FY03/18
Semiconductor equipment
Gearbox for motor manufacturers
Optical devices
Excavation system for oil, etc.

FY03/19
Flat panel display equipment
Machine tools
Transporter
Others

9,260

2,326

10,041
1,706

126
739
488

1,962

4,926
200
1,163

3,960
440
1,055

5,040
376
1,161

1H

2H

1H

114
522635

FY03/20

177
487
618

FY03/21

Robotics
Printing machines
Measuring machines

7Copyright © 2020 Harmonic Drive Systems Inc.

Breakdown of year‐on‐year change in non‐consolidated
operating income
Decrease in
fixed
manufacturingcosts, etc.

+384
354

Impact ofsales decline Impact of(263) changes inmarginal
profit ratio,inventory, etc.

(millions of yen)

Increase in
SG&A expenses

(29)

416

(30)

1H FY03/20

1H FY03/21

8Copyright © 2020 Harmonic Drive Systems Inc.

Status of consolidated assets(millions of yen)

132,568

140,000

127,427

120,000

19,57023,718Cash & bank deposits andsecurities

7,245

7,673

Trade receivables

5,755
3,416

5,784
977

100,000

Inventories
Other current assets

80,00045,50043,765

Tangible fixed assets

60,00040,00035,791

36,026
Intangible fixed assets

20,0000

10,146

14,622Mar. 31, 2020
March 31,2020Sep. 30, 2020
September 30, 2020

Investments and otherassets

9Copyright © 2020 Harmonic Drive Systems Inc.

Status of consolidated liabilities and net assets(millions of yen)

140,000
120,000

132,568

127,427
6,963

14,010100,000

6,722

Trade payables
Other current liabilities
Long‐ and short‐term borrowings

15,139Other fixed liabilities

1,953
3,399

1,472
2,682

625
4,385

625
4,263

Stock option
Non‐controlling interests

80,00060,000100,342 Owned capital

97,40840,000Equity ratio
76.4%

20,000Equity ratio
75.7%

0March20
3月期
年31,2020

September2020
20年 930,月期
10Copyright © 2020 Harmonic Drive Systems Inc.

Status of consolidated cash flows(millions of yen)

1H FY03/20

1H FY03/21

Cash flow from operating activities

8,756

6,132

Cash flow from investing activities(9,638)(735)

Cash flow from financing activities

3,522(1,385)

Effect of exchange rate changes on cash and cashequivalents

(50)

(22)

Net increase (decrease) in cash and cash equivalents

2,590

3,987

Cash and cash equivalents at end of period

20,19022,33011

Copyright © 2020 Harmonic Drive Systems Inc.

Performance Forecasts
for Full‐year FY03/21

12
Copyright © 2020 Harmonic Drive Systems Inc.

Consolidated performance forecasts for full‐year FY03/21(millions of yen)

FY03/20
AmountPercent (%)

FY03/21 (forecasts)

Year‐on‐year changeAmountChange

Percent (%)

Rate (%)

Net sales

37,487100.0

35,000100.0(2,487)(6.6)

Operatingincome
Ordinary
income67

0.2(800)－(867)－

499

1.3(450)

－

(949)

－

Net income

(832)

－

(450)

－

382

－

EPS (yen)(8.65)－(4.67)－

3.97－

Capitalinvestment

7,892－

2,800－(5,092)(64.5)

Depreciation

7,467－

6,800－

(667)

(8.9)

R&D
expenses

2,195－

2,700－

504

23.0

Assumed exchange rate for FY03/21 forecasts: 1USD = ¥105.00 1EUR = ¥120.00
Net income (loss) refers to net income (loss) attributable to owners of parent.

1CNY = ¥15.00

13Copyright © 2020 Harmonic Drive Systems Inc.

Performance forecasts on main group companies for(millions of yen)full‐year FY03/21
Net sales
Equity stake
Harmonic Drive Systems
Inc.

－Net income

AmountYear‐on‐yearchange (%)

AmountYear‐on‐yearchange (%)

22,000

11.2

1,000

－

HD Systems, Inc.
(Harmonic Drive L.L.C.)(U.S.A)

100%
(51%)

5,300(15.3)

90(75.3)

Harmonic AD, Inc.

100%

1,600(10.1)

0－*3

Harmonic Drive Systems(Shanghai) Co., Ltd.

100%

2,000(40.0)100(50.0)*4*6Harmonic Drive SE(Germany)

74.7%

9,400(26.2)

0－*2
*5

*1 For overseas subsidiaries, the fiscal year ends December 31.
*2 Exchange rates: Jan–Dec 2019 1USD = ¥109.05, Jan–Dec 2020 1USD = ¥105.00*3 Exchange rates: Jan–Dec 2019 1CNY = ¥15.78, Jan–Dec 2020 1CNY = ¥15.00*4 Exchange rates: Jan–Dec 2019 1EUR = ¥122.07, Jan–Dec 2020 1EUR = ¥120.00*5 Net income of US subsidiaries (consolidated) is after excluding non‐controlling interests.
*6 The figures for Harmonic Drive SE are on a consolidated basis, including results of its subsidiaries; net income is before excluding non‐controlling interests

14Copyright © 2020 Harmonic Drive Systems Inc.

Non‐consolidated orders by application (quarterly)(millions of yen)

6,000

5,447
4,788
1,146

4,000
2,839

2,000

960
76
191
187

869

0

3,092
794
59
206
195

5,131

4,984

1,076

127

46
245
418

249
290

597

1,076

41
220
318

2,390

2,764

268

172

46
245
213

2,145

2,145

1,170

77
192

85
325

151
416

692

649

151
575

Q1

Q2

Q3

Q4

Q1

Q2

FY03/20
Semiconductor equipment
Gearbox for motor manufacturers
Optical devices
Excavation system for oil, etc.

FY03/21
Flat panel display equipment
Machine tools
Transporter
OthersRobotics
Printing machines
Measuring machines

15Copyright © 2020 Harmonic Drive Systems Inc.

Non‐consolidated performance forecasts for full‐year
FY03/21(millions of yen)
FY03/20
AmountPercent (%)

FY03/21 (forecasts)

Year‐on‐year change

AmountChangePercent (%)

Rate (%)

Net sales

19,788100.0

22,000

100.0

2,211

11.2

Operatingincome
Ordinaryincome

380

1.9

1,200

5.5819

215.5

848

4.3

1,450

6.6

601

70.1Net income

(173)

－

1,000

4.5

1,173－EPS (yen)(1.80)－

10.39－

12.19－

Capitalinvestment

5,022－

2,100－(2,922)(58.2)

Depreciation

3,289－

3,000－

(289)

(8.8)

R&D
expenses

1,572－

2,100－

527

33.5

Assumed exchange rate for FY03/21 forecasts: 1USD = ¥105.00

1EUR = ¥120.00

1CNY = ¥15.00

16Copyright © 2020 Harmonic Drive Systems Inc.

Sales trends (non‐consolidated)(millions of yen)

49,2494‐year average including
FY03/21 forecast:
32,505 mil. yen

50,0004‐year average:33,692 mil. yen

38,98240,00030,00024,02026,74721,04819,78820,00013,90425,22910,00012,84322,0009,260

11,958

10,527

10,041

FY03/20

FY03/21(forecast)

17,9340
FY03/17

FY03/18

1H

FY03/19

2H17
Copyright © 2020 Harmonic Drive Systems Inc.

Breakdown of projected year‐on‐year change in
non‐consolidated operating income(millions of yen)

Impact of sales
increase

Decrease in fixedmanufacturing costs, etc.
+330

+1,200
Impact ofchanges inmarginal
profit ratio,
inventory, etc.

380

FY03/20(130)

1,200Increase in
SG&A
expenses(580)

FY03/21 (forecast)18
Copyright © 2020 Harmonic Drive Systems Inc.

Future Outlook

19
Copyright © 2020 Harmonic Drive Systems Inc.

1. Order trends and outlook

20
Copyright © 2020 Harmonic Drive Systems Inc.

1‐1. Our operating environment
COVID‐19 outbreak caused recovery to stall
Consolidated order trend(millions of yen)

25,000FY03/21

20,00015,00014,43914,022

15,715

15,645
9,526

10,000
5,000
0

1,894

1,867

3,901

1,707

2,076

3,834

4,264

4,442

3,681

4,695

4,088

Q1Q2Q3Q4Q1Q2

2,006

FY03/18

2,247

3,994

3,117
1,030
3,029

3,181
1,478
3,016

2,629
746
2,202Q3

Q4

Q1Q2

1,562

FY03/19

Europe

Asia

6,449

North America

4,861

4,268

4,913

1,242
2,398

1,509
2,446

1,854
3,065

Q3

Q4

Q1

FY03/20

4,574
1,049
1,997
Q2

FY03/21

Asia

Steady demand from Chinese market for domestic robot manufacturers

NorthAmerica

Orders for service robots were down, but orders for semiconductor and medical
applications were steadyEurope

Manufacturers with a strong presence in the Chinese market showed signs ofrecovery, but overall market remained sluggish
21Copyright © 2020 Harmonic Drive Systems Inc.

1‐2. Worldwide outlook for number of industrial robots sold
■ COVID‐19 outbreak led to a slowdown in capital investment■ Meanwhile, automation and labor‐saving demand accelerated amid pandemic
Annual installations of industrial robots
2014‐2019 and 2020*‐2023*
700

IFR has not published an outlook

600
500

‘000 of units

V‐shapedrecovery

400
11%

300

400

422
373

Prolongedimpact

304

200

221

254

10002014

20152016

20172018

2019

2020*

2021*

2022*

2023*Source: compiled by the Company based on IFR World Robotics 2020

22Copyright © 2020 Harmonic Drive Systems Inc.

1‐3. Collaborative robots (co‐bots)■ COVID‐19 response: Rising demand for collaborative robots for managing labor and avoiding thethree Cs (Confined spaces, Crowded places, and Close contact)■ More companies newly entering the collaborative robot market, leading to market growth
Annual installations of collaborative robots
30

6.00%

25

5.00%

4.84%

‘000 of units

20
1510

3.84%
2.78% 16

18

4.00%
3.00%
2.00%

1151.00%

00.00%
2017201820192020～# of co‐bots as a % ofindustrialrobots
Source: IFR World Robotics 2020
Source: Compiled by the Company based on IFR World Robotics 2020

23Copyright © 2020 Harmonic Drive Systems Inc.

1‐4. Semiconductor manufacturing equipment andsurgical robots
Semiconductor manufacturing equipment
 Driven by cutting‐edge technology investment by foundries;
Large‐scale capital investment in memory in full swing Domestic semiconductor production efforts accelerated inChina. Production capacity expansion led to higher sales ofsemiconductor manufacturing equipment.

Surgical robots
 Wide variety of robots under development globally Harmonic Drive Systems and group companies
cooperating from the development stage
 Can showcase our product strengths (compactness &ultra‐precision) in this market
 Market set to grow with widespread adoption ofremote surgery in conjunction with 5G expansion;
Expectations as future growth driver for the Company

24
Copyright © 2020 Harmonic Drive Systems Inc.

2. COVID‐19 measures

25
Copyright © 2020 Harmonic Drive Systems Inc.

2‐1. Initiatives to minimize risk of infection
Safety and security of employees and stakeholders isNo. 1 priority• Thorough disinfection and ventilation implemented;
placed posters to alert safety measures• Encouraged remote work and avoiding public transportation• Developed remote work infrastructure• Changed office layout to avoid three Cs• Established a hub in Omiya to maintain Kanto area sales mobility

Omiya Hub

COVID‐ready production and sales system• Used new factory wing office to avoid three Cs• Production accelerated by one day assuming a one‐day factory shutdown in the eventof an infection• Implemented tools and stepped‐up efforts to improve remote communication skills ofemployees to enhance remote customer service

26
Copyright © 2020 Harmonic Drive Systems Inc.

NA22‐2. Sales initiatives during the COVID‐19 outbreak
Exhibition participation

Virtual exhibitions

 Proactively participating in exhibitions
with thorough infection prevention
measures in place Plans in place to participate in virtualexhibitions

 Technical presenters provide productdescriptions from our factory using a
remote conferencing system Introduced own virtual exhibition on
the company website

We are maximizing output by combining
physical and virtual worlds.
27
Copyright © 2020 Harmonic Drive Systems Inc.

3. Review of current medium‐termmanagement plan

28
Copyright © 2020 Harmonic Drive Systems Inc.

3‐1. Basic policies of medium‐term management plan
spanning FY03/19 to FY03/21
50th Anniversary of Founding
Seize rapidly expanding growth opportunities and advance to next stage
Expansion of RD, MT, and AD businesses (establishing three cores)
Buildout global monthly HD production capacity to 280,000+ units

Increase customer
satisfaction by raising QCDS
capabilities

Raise capabilities of groupcompanies to strengthen
all‐around abilities

Strengthen managementfoundation (especially humanresources) to support futuregrowth

Staging the Growth for Years 2030 and 2050

29
Copyright © 2020 Harmonic Drive Systems Inc.

3‐2. Consolidated net sales(medium‐term management plan versus results)
US‐China tradefriction(millions of yen)

100,000
100,000

Postponement of
capital investment

FY03/19

FY03/2180,00068,50067,809

Excess inventory

60,000FY03/20

40,00037,487COVID‐19

Actualresults

Medium-termplan target

35,00020,0000Medium-termplan target

Actualresults

Forecast

30
Copyright © 2020 Harmonic Drive Systems Inc.

4. Toward formulating the next
medium‐term management plan
(FY03/22 to FY03/24)

31
Copyright © 2020 Harmonic Drive Systems Inc.

4‐1. Next medium‐term management plan(FY03/22 to FY03/24)■ Missed current medium‐term targets, but our competitiveness and managementfoundation remains solid■ Firming up on sectors based on economic indicators and less sensitive to capital investment
trends (medical, aerospace, animatronics, etc.)

Diversifying operating environment

32
Copyright © 2020 Harmonic Drive Systems Inc.

4‐2. Mechatronics focus
Develop mechatronic products that maximize
Harmonic Drive® performanceDriverHighresponse

Actuator

Ultra‐compactUltra‐flat

Bringing thecustomer’svision to life
throughinnovative
mechatronicproducts

Medical /ResearchRobotics / FA

Collaborative
RobotsAGV

33
Copyright © 2020 Harmonic Drive Systems Inc.

4‐3. Company‐wide quality improvement
Quality

Fulfilling customer expectations

Improve product and operational quality
Example of a FY03/21 initiative:
Launched the Emergency Response (ER) Team
Swiftly responded to urgent customer requests through company‐wide efforts

Quick responses and proposals led to inquiries34

4‐4. Alliance with SRI: A stepping stone to the future■ Joint research on Abacus drive with SRI・Pure rolling cycloid drive
・Features of Abacus drive‐ High energy efficiency (low loss)‐ Low reduction ratio region(complementary with strain wave gearing devices)■ Prototype evaluation
・Confirmed 96.6% energy efficiency
Continuing research as a next‐generation new technology
35
Copyright © 2020 Harmonic Drive Systems Inc.

Copyright © 2020 Harmonic Drive Systems Inc.