Optorun Co., Ltd.
～ Strong performance in optical business areas such as
smartphones contributed to 1Q2024 results.～
Financial Results for 1Q FY12/2024
May 13, 2024
Optical Thin Film Equipment

Semiconductor Optical Fusion

Electronic Device Equipment

Equipment

Investor Relations / May.13 2024

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1

Forward-looking statements
 Forward-Looking Statements
This document contains "forward-looking statements." These statements include those relating to expected growth andtrends in our business and markets, industry outlook and demand factors, our investment and growth strategies, thedevelopment of new products and technologies, and current and future business prospects. We assume no obligation to
update or revise any forward-looking statements, which may differ materially from expectations and plans due to changes ina variety of external and internal factors.

 Foreign Exchange Risk
Export sales of manufacturing equipment, our main product, are affected by fluctuations in the U.S. dollar exchange rate due
to our heavy reliance on U.S. dollar-denominated production. Since our manufacturing costs are highly dependent on
production in Greater China, they are affected by fluctuations in the Chinese yuan. The foreign exchange assumptions used inour business outlook are based on past performance and are intended to reduce the impact of foreign exchange rate
fluctuations. Although our export destinations are highly dependent on Greater China, our end-user customers are spreadworldwide.

 Actions to Achieve Management Conscious of Cost of Capital and Stock Prices
As a policy to deal with cost of capital and stock price awareness, we have defined "operating margin" and "ROE" in the
management targets of our mid-term management plan. We assume that we will pay stable dividends and conduct flexible
and strategic share buybacks in order to increase shareholder value. However, with an eye on sustainable growth, we plan
to aggressively pursue R&D, capital investment, and strategic business alliances, including M&A. For inquiries, pleasecontact E-mail: ir-info@optorun.co.jp
Investor Relations / May.13 2024

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2

Topics
 Consolidated Orders Received and Business Results for 1Q of FY12/2024
Orders received improved to 11.1 billion yen, up 16% from the previous year, due to a recovery in investment related tosmartphones (hereafter referred to as "smart phones"). In particular, inquiries for ALD systems (Atomic Layer Deposition)
for smartphones and camera modules increased. Sales rose 25% YoY to 11.3 billion yen due to the increased contributionof ALD systems, and operating profit rose 52% YoY to 4.0 billion yen. Ordinary income rose sharply due to a decrease inforeign exchange-related losses. Exchange rates were ¥151.41/$ and ¥20.83/Yuan.

 Consolidated Orders and Forecasts for FY12/2024 and Business Environment
Orders are expected to recover due to increased investment related to AI smartphones. Net sales are expected toincrease 1% y/y to 37.0 billion yen due to the performance of the optical domain. Operating income is expected
to decline 23% YoY to 7.6 billion yen due to the strong yen and intensified price competition, but ordinary income
is expected to increase 25% YoY to 7.6 billion yen. The exchange rate assumptions are 130 yen to the dollar and20.5 yen to the yuan. The operating income sensitivity is estimated to be -¥150 million for a ¥1 appreciation of
the yen against the dollar and +¥100 million for a ¥0.1 appreciation of the yen against the yuan.

 Medium-Term Management Plan and Next Business Strategy
The Company's management targets assume an operating margin of over 20% and ROE (return on equity) of over 10%. To
increase shareholder value, we assume a stable dividend payment based on a consolidated payout ratio of at least 30%
and flexible and strategic share buybacks. 52 yen dividend per share (interim dividend of 26 yen) is planned for the fullyear of FY12/2024. In our business strategy for the next fiscal year, we intend to make semiconductor optical integrationand electronic devices the pillars of business growth in addition to optics, as shown in Business Domain Development.
Investor Relations / May.13 2024

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3

Business Domain Development

Optics

Semiconductor Optical
FusionElectronic Device■ Photoelectric Fusion Devices• Datacom Transceivers■ Green Energy■ AI Smartphone• CMOS image sensor• Periscope Lens

• Board Connection Devices■ Communication Devices■ EV/Connected Car• ADAS■ Spatial Computer(Advanced Driver Assistance Systems)• Micro LED/LiDAR sensor• Integrated Cockpit/Mobility• OLED Display

Investor Relations / May.13 2024

• Power Semiconductor• All Solid-state Battery• Millimeter Wave Devices
BAW/SAW/RF

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4

Orders Received and Results of Operations
Figure 1: Orders Received, Business Performance and Per Share Indicators/Financial Indicators (in millions of yen, yen, %)accounting period

12/2024

Year-on-Year ％12/2018

12/2019

12/2020

12/2021

12/2022

12/2023

Orders received

39,821

36,06228,60635,435

43,12424,080

11,136-

16.4-

Order backlog

39,22832,46823,58328,12636,947

24,21924,058

-

-35.8

-

Net sales

44,76342,82237,49130,89234,30436,807

11,29837,00024.7

0.5

Operating income

10,69010,879

8,628

7,025

7,449

9,752

3,965

7,500

51.7

-23.1

Ordinary income

10,993

11,031

8,610

7,901

8,763

6,051

4,325

7,600

138.3

25.6

Income before income taxes

10,748

11,488

8,678

8,773

9,405

5,998

4,321

-

138.1

-

Income taxes

3,001

2,386

1,874

2,440

2,512

1,325

1,030

-

148.8

-

Net income

7,746

9,102

6,797

6,330

6,890

4,632

3,284

5,400

134.1

16.6

Net income per share

187.6

216.7

159.1

146.8

159.0

106.1

75.0

123.2

132.5

16.1

Dividend per share

55.0

60.0

50.0

50.0

50.0

50.0

-

52.0

-

4.0

Net assets per share

676.2

821.1

919.0

1,066.0

1,199.1

1,285.3

1,343.9

-

12.5

-

Gross profit margin

39.0

41.3

39.2

43.3

43.6

50.1

52.4

-

1.9

-

Operating income margin

23.9

25.4

23.0

22.7

21.7

26.5

35.1

20.3

6.3

-6.2

Corporate tax rate

27.9

20.8

21.6

27.8

26.7

22.1

23.8

-

1.0

-

Inventory turnover days

327.1

220.4

178.4

268.1

385.2

357.7

275.0

-

-40.5

-

Return on equity

30.6

29.0

18.3

14.8

14.0

8.5

-

-

-

-

item

Q1

Full Year E

Q1

Full Year E

Note: Accounting is based on Japanese GAAP, Forecast is our forecast, and figures are rounded to the nearest million yen.
Investor Relations / May.13 2024

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5

Balance Sheets and Statements of Cash Flows
Figure 2: Summary of main balance sheets and statements of cash flows (in millions of yen)accounting period

12/2018

12/2019

12/2020

12/2021

12/2022

12/2023

12/2024
Q1

Cash and deposits

15,741

26,97022,72332,27434,92333,05433,329Notes and accounts receivable-trade

6,417

3,902

9,426

5,627

7,423

4,882

3,206

Inventories

24,487

15,173

11,147

12,85520,43017,98916,213Current assets

48,14247,19444,57253,14565,401

57,632

55,184

Fixed assets

7,502

9,315

9,755

11,52917,51520,85921,775

Total assets

55,64456,50954,32764,67582,91678,491

76,959Notes and accounts payable-trade

1,653

2,735

1,703

3,246

4,785

1,284

2,326

Short-term interest-bearing debt

757

510

489

472

414

403

402.8

20,10913,989

8,922

9,831

19,06014,743

9,441

Current liabilities

25,923

19,826

13,655

17,05728,40019,097

14,812

Fixed liabilities

1,659

1,864

1,157

1,535

2,357

2,478

2,637

Net assets

28,06334,81939,51546,08452,15956,91659,510Cash flows from operating activities

9,572

16,233-535

10,686

8,561

3,180

-

Cash flows from investing activities-2,964-2,432-1,048376-4,396-3,599-

Free cash flow

6,608

13,801-1,583

11,061

4,165

-419

-

-10,054-2,359-2,467-2,735-2,172-2,207-

item

Contract liabilities

Financial Cash Flows

Note: Figures are rounded to the nearest million yen; notes and accounts receivable take into account allowance for doubtful accounts; short-term
interest-bearing debt is the sum of short-term borrowings and lease obligations.
Investor Relations / May.13 2024

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6

Key Points of 1Q FY12/2024 Results and FY12/2024 Forecast
 Consolidated Orders and Results for 1Q FY12/2024
Orders received improved to 11.1 billion yen, up 16% from the previous year, due to a recovery in investment related to smartphones. In
particular, inquiries for ALD systems (Atomic Layer Deposition) for smartphones and camera modules increased. Sales rose 25% YoY to 11.3
billion yen due to the increased contribution of ALD systems, and operating profit rose 52% YoY to 4.0 billion yen. Ordinary income rose
sharply due to a decrease in foreign exchange-related losses. The exchange rate was 151.41 yen to the dollar and 20.83 yen to the yuan.
The smartphone market has been experiencing a prolonged replacement cycle due to maturing demand, but the emergence and strong salesof AI smartphones has enabled us to win orders for new equipment: cutting-edge semiconductor chipsets with AI functions, 1-inch image
sensors, double periscope and triple foldable displays, and other new technologies. With the adoption of new technologies, smartphones may
stimulate demand for high value-added products. However, we are cautious about this decision due to geopolitical risks and concerns aboutan economic slowdown.

 Consolidated Orders and Forecasts for FY12/2024 and Business Environment
Orders are expected to recover due to increased investment related to AI smartphones. Sales are expected to increase slightly due toexpansion in the optical business area. Operating income is expected to decrease due to the strong yen and intensified pricecompetition, while ordinary income is expected to increase. The exchange rate assumptions are ¥130/$ and ¥20.5/yuan, which are
more cautious than the current exchange rate. The operating income sensitivity is -¥150 million for a $1 appreciation of the yen
against the dollar and +¥100 million for a ¥0.1 appreciation of the yen against the yuan.
The AI generation revolution is expected to expand demand for film deposition in all business domains, including optics, semiconductor
optics integration, and electronic devices. The incorporation of generative AI functions in top-end smartphone models and the increased
sophistication of cameras with compound eyes and larger format are expected to stimulate demand for new equipment. The
semiconductor optical fusion business is positioned as a key focus area, and plans include aggressive R&D and IP investments andM&A. In the EV/automotive area, new equipment demand is expected to arise from improved automatic driving technology.
Investor Relations / May.13 2024

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7

Orders, Sales and Profitability/Profitability Indicators
Figure 3: Orders Received, Sales and Profitability/Profitability Indicatorsⅱ．事業別売上高

bn, yen

％

100.0

60

90.0

Sales (LHS)

Orders (LHS)

OP Margin (LHS)

ROE (RHS)

42.4
39.0
80.0

29.0
21.9

40.0

30.6
23.9

29.0
25.4

16.0

26.5
23.0

22.7

21.7

18.3

14.8

14.0

30
20.3
20

8.5

14.4

44.8
39.8

36.6

36.1

10

43.1

42.8
37.5

33.4
28.6

30.0
20.0

50

43.6

39.2

52.5
50.0

43.3

50.1

40

33.7

70.0
60.0

41.3

Gross Margin (LHS)

35.4

34.3

36.8

37.0

0

30.9
-10

24.1

-20

14.9

10.0

-30

0.0

-40
2016

2017

2018

2019

2020

2021

2022

2023

2024E
FY

Note: The exchange rate assumptions for FY12/2024 are $130/$ and ¥20.5/ yuan. Operating income sensitivity is -150 million yen at $1/$ and+100 million yen at 0.1 yen/ yuan.
Investor Relations / May.13 2024

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8

Quarterly Orders
Figure 4: Quarterly Orders Received
ⅱ．事業別売上高

mn. yen
20,00015,000％18,84013,83913,203
11,136
9,563

10,000

6,085
5,000

4,298

4,134

Q3 2023

Q4 20230-2,758-5,000Q1 2022

Q2 2022

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q1 2024
Q/FY

Note: Figures for orders received by business domain are not disclosed from FY12/2024.

Investor Relations / May.13 2024

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9

Quarterly Sales by Business Domain
Figure 5: Quarterly Sales by Business Areaⅱ．事業別売上高

mn. yen％15,000Component, others
Semi. Optical fusion
11,862

Optics

11,286

Sales
1,020

632

11,298

536

822
233

9,510

10,000

9,063
8,391
430

1,361

656

8,009
599

1,260

7,874
505
151

1,354

5,000

5,117
319

10,693

10,266

10,243

8,148

7,961

7,148

7,218
6,056

4,798

0

Q1 2022

Q2 2022

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q3 2023

Q4 2023

Q1 2024
Q/FY

Note: Optics business area includes AI smartphones, EV/connected cars, and optical components; Semiconductor optical fusion and electronic devices
business area includes optoelectronics, spatial computers, optoelectronic fusion devices green energy, communication devices, and MEMS devices.

Investor Relations / May.13 2024

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10

Medium-term Management Policy

Investor Relations / May.13 2024

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Medium-Term Management Targets
 Medium-Term Management Plan and Next Business Strategy
As management targets, we assume an operating margin of over 20% and ROE (return on equity) of over 10%. To increase
shareholder value, the company is considering stable dividends based on the assumption of a consolidated payout ratio of
30% or more and flexible and strategic share buybacks. As shown in the business domain development in the next businessstrategy, we intend to make semiconductor optical integration and electronic devices the pillars of business growth inaddition to optics.
Figure 6: Medium-Term Management Targets by Domain (Unit: billions of yen)
65.0
Others60.0Electronic devices
55.0

Semi. optical fusion

50.0

Optics

45.0
40.0

36.8

37.0

2023

2024E

35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0

Investor Relations / May.13 2024

2025E

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2026E

FY

12

Cash Allocation (3 years)
Figure 7: Cash Allocation

Cash inCash out□ R&D

Cash flows from operating
activities(Excluding R&D expenses)
15-30 billion yen

Growth &strategic
investment

R&D investment

Semi.optical fusion

Capital investment

Electronic devices

M&A□ Capex
Development bases□ M&A

Cash on hand
33 billion yen

Investor Relations / May.13 2024

Shareholder
returnDividends, etc.

Working capital

Cash on hand

Copyright © OPTORUN Co., Ltd. 2024, All rights reserved.(6235)□Consolidated
dividend payout ratio
30% or more
□ Large orders
Preparing for theunexpected13Capital Expenditure and R&D Expenditure Plan
Figure 8: Capital Expenditures, Depreciation and R&D Expenses
Japan Headquarters Tsurugashima

Semiconductor Technology, Shanghai

Hanoi, Vietnam

Research and development center for advanced
fields such as optics, semiconductor optics,
and electronic devices

Production and R&D base for new technology
equipment, such as ALD equipment, to begin
operations in Jan. 2024

Equip. design, equip. installation, maintenanceand repair for customers in Southeast Asia, andparts machining and sales Start of operation in
Dec. 2023

Capex & Dep.
5.7

bn, yen
6.0

6.0
Capex

5.0

DEP.

5.0

4.3

4.0

4.0
3.1
3.0

3.7

3.4

3.1

3.0

2020

2021

3.0

2.4

2.0

2.0
1.0

R&D

bn, yen

0.9

0.7
0.2

0.3

0.5

0.8

1.1
1.0
0.0

0.0
2020

2021

Investor Relations / May.13 2024

2022

2023

2024E

FY

2022

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2023

2024E

FY

14

Shareholder Returns/Dividend Forecast Shareholder Returns / Dividend Forecast
We will return profits to shareholders based on a consolidated dividend payout ratio of 30% or more, while securing thenecessary internal reserves for R&D investment, production system reinforcement, and new business development. In order
to increase shareholder value, we plan to pay interim and year-end dividends twice a year starting from the fiscal year
ending December 31, 2024, and plan to pay a full-year dividend of 52 yen for the fiscal year ending December 31, 2024.
Dividends may be revised in the event of significant changes in earnings conditions.
Figure 9: Dividend per share and annual dividend payout ratioⅱ．事業別売上高

yen
100.0Interim dividend per share (LHS)

42.2

Dividend payout ratio (RHS)

80.0
70.0

50

47.1

Year-end dividend per share (LHS)
90.0

％

40

34.1

35

31.4

31.4

45

60.0

30
50.0

50.0

50.0

50.0

52.0

50.0

25

40.0

26.0

20

30.0

15

20.0

10
26.0

10.0

5

0.0

0
2020

Investor Relations / May.13 2024

2021

2022

2023

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2024E

FY

15

Optical Thin Film Equipment/AI Smartphone
Figure 10: Optical Thin Film Equipment for AI Smartphones

Frame decoration film
(Sputtering equipment)

Black film
(Sputtering equipment)

IR cut filter(Evaporation equipment)

Decorative film
(Evaporation and sputtering equipment)
3D Decorative Film
(Sputtering, ALD equipment)

Lens, Anti-reflection film
(Evaporation, ALD system)
Hard anti-reflective coatingAnti-fouling film,
Anti-glare processing(sputtering and etching equipment)
Investor Relations / May.13 2024

Increased demand for new equipment due tothe increasing sophistication of smartphones
such as Periscope

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16

Semi. Optical Fusion Equipment/Optoelectronic Fusion Devices
Figure 11: Semiconductor optical fusion equipment for optoelectronic fusion devices

Carrier wafer/glass

Optical Transceivers

Chip-to-chip optical transmission(Optical conversion devices and optical wiring)

Photoelectric Fusion Technology to Contribute to Realization of Chip-to-Chip Optical Transmission Devices

2nd Gen. Optical Comm.

Evaporation Equipment
Investor Relations / May.13 2024

3rd Gen. Optical Comm.

3.5 Gen. Optical Comm.

Sputtering equipment
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ALD system
17

Semiconductor Optical Fusion Equipment/Spatial Computer
Figure 12: Semiconductor optical fusion equipment for spatial computers

Half Mirror(Evaporation equipment)

3D Camera(Sputtering equipment)

Lens surface(Evaporation, sputtering equipment)

Diffraction Grating/Wave Guide(ALD, Etching system)

Microdisplays(ALD, etching equipment)
Microfabrication and 3D deposition technologies contribute to technological innovation in AR/VR

Investor Relations / May.13 2024

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18

Electronic Devices/BAW Filters
Figure 13: Electronic Device Equipment for BAW filters (bulk surface wave filters)

Electrode portion metal film
(Evaporation equipment)

Piezoelectric thinfilm(Sputtering equipment)

Electrode portion metal film
(Evaporation equipment)

Note: BAW filter is an abbreviation for Bulk Acoustic Wave Filter, which is essential for mobile communication systems using 2GHz and above, and SAW(Surface Acoustic Wave) filter is used from 800Mhz to 2GHz.

Investor Relations / May.13 2024

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