Business Results for First Quarter,
FY2016Creative Links to World Electronic
Aug 1st, 2016
Hirose ElHiElectrictiCo.,Ltd1Cautionary Statement
In this material, there are descriptions based on current
estimation by Hirose Electric.
Hirose cautions you that a number of important risks,
uncertainties and others could cause actual results todiffer materially from those discussed in the *forwardlooking statements. Thank you for your understanding.
*Forward-looking statements include, but are not limited to, those statements using words such as“believe,” “expect,” “plans,” “strategy,” “prospects,” “forecast,” “estimate,” “project,” “anticipate,”“aim ” “may” or “might” and words of similar meaning in connection with a discussion of future“aim,”
operations, financial performance, events or conditions. These statements are based on
management’s assumptions and beliefs in light of the information currently available to it.

2Business Situation of 1Q FY2016[FY2015]• 1Q : Smartphone was steady in Chinese market but sluggish in Korean market.
Automotive enjoyed a stable trend in overseas market.
• 4Q : Decrease continued in Smartphone market, such as Chinese market etc.
Industrial market was still in adjustment phase, but partial recovery was seen in
March Automotive market continued the good trend
March.
trend.

[1Q FY2016 (Apr-Jun)]• Smartphone market orders had slightly exceeded
expectation for Chinese market, etc. Automotive market
trend was stable. Industrial market sales started weak, butended with an upward trend.
• 1Q FY2016 results settled on
Order : 302.3 hundred million yen (-2.3% YoY, 9.5% over 4Q FY2015)
Sales: 276.4 hundred million yyen (-8.5% YoY, -2.4% over 4Q FY2015)
Recurring Profit: 72.3 hundred million yen(Ratio 26.2%, -8.2%YoY, +28.6% over 4Q FY2015)3FY2015 1Q – FY2016 1Q Orders and Sales (Consolidated Basis, Index Number)
Total
120

104

103
100102

103

Averageg of FY2015＝10010010194
92

OrderS lSales

101
92

Sales turned upwardi thinthe llattertt hhalflf

80
1Q

2Q

3Q
FY 2015

4Q

1Q
1Q
FY 2016
4FY2015 1Q – FY2016 1Q Sales by Markets (Consolidated Basis, Index Number)
Smartphone / Mobile120103
10010599

Average of FY2015＝100928680
Monthly index
Apr: 76, May: 81, Jun: 103

60
1Q

2Q

3Q

4Q

FY 2015

1Q
1Q
FY 2016

S ales5

FY2015 1Q – FY2016 1Q Sales by Markets (Consolidated Basis, Index Number)
Automotive
120

104

101
10010296

Average of FY2015＝100
FY2015 100

94

Stable trend

80
1Q

2Q

3Q

4Q

FY 2015

1Q
1Q
FY 2016

S ales6

FY2015 1Q – FY2016 1Q Sales by Markets (Consolidated Basis, Index Number)
Associated Electric Equipment
Equipment,
FA Controlling Device, and Others
120106100102Average of FY2015＝100

97

95

96

Sluggish May: index 83
Recovery trend in Jun:index 10480
1Q

2Q

3Q
FY 2015

4Q

1Q
1Q
FY 2016

Sales

7Business Results for 1Q, FY2016(hundred m illions of Yen)
Major c hanges ov er prior s ame period(A) FY2015(A) FY2016

1Q

1Q

Sales

302.2

276.4 -25.8(COGS Ratio)（54.4％）（52.8％）（-1.6％）[COGS Ratio](S GA Rat io)（21.3％）（21.5％）（+0.2％）

Depreciation ratio 6.1% → 4.2%

(B)-(A)(B)/(A)[Sales]Operating
P fiProfit

73 573.5

71 071.0-2.525(%)

25.7%（+1.4％）

Recurring
P fitProfit

24.3%

78 8
78.8

72 3
72.3-6.5
65(%)

26.1%

26.2%

（+0.1％）

52 252.2

52 952.9070.7(%)

17.3%

19.1%

（+1.8％）

3,219.2

3,102.6-116.5

90.3%

90.1%

S hareholders ' E quit yRat io

Income Per Share
Currency rate: US$
Currency rate: €Currency rate: 100won

-8.5%

-3.4%
3 4%

108.14Yen
10814Yen
122.02Yen
9.30Yen25.8 Yen decrease
Subsidiary
-8.1

-17.7

1.6 point derease[SGA Ratio]0.2 point increase
Expense decreased (-5.0), but at the timedecrease in sales[Non-Operating Profit/Loss]

-8.2%
8 2%

Currency exchange gain/loss +1.2 → -2.4

[Income Taxes] 7.3 decrease→

19.1

Tax effect on overseas subsidiaries retained earnings

1 4%
1.4%

gyyen -4.3
due to strong
Domestic lower tax rate and margin amount decrease
etc. -3.0-3.6%

146.6Yen 151.32Yen
121.36Yen
12136Yen
134.16Yen
11.07Yen

Hirose26.4

Net Profit
Total Assets(unit : hundred millions of Y en)**Impact on operating and recurring profit amountdue to depreciation method change (fixed rate →straight-line) and partial change in useful life
(increase amount in profit/loss)

5.0(hundred m illions of Yen)YoY impact amountSales- 29.3Operating profit- 11.7

Recurring profit- 15.7

8

Quarterly Sales and Profits
500(hundred millions of Yen)
40.0%

400

27.7%
310

29.2% 28.5%
315

314

25.8% 26.1%
319

300

302

28.6%
310

26.5%
307

26.2%

30.0%

19.9%
283

276

20.0%

Recurring
10.0%

200Profit
Recurring

0 0%
0.0%
100

Sales

8692

9082

798982

5672

Profit Ratio-10.0%Main
Change Factor (hundred millions of Yen)Recurring
Sales0FY2015 4Q

283

Currency impact amount-10-20.0%

Q
1Q

2Q
Q

3Q
Q

FY2014

4Q
Q

1Q
Q

2Q
Q

3Q
Q

FY20154Q
Q

1Q
Q
1Q

profitDepreciation decrease
Shipment increase etc.

FY2016 FY2016 1Q

56-3
173227672

9

Changes in Consolidated Balance Sheet(hundred millions of Yen)A
Accountt(A) M
Mar 31
31, 2016(B) Jun
J 30,30 2016(B) - (A)RRemarkk

Increase due to redemption of37.4 government bond, etc.

Cash andCash in Bank

1,647.5

1,684.9

Trade
Receivables

273.4

269.9-3.5 Decrease due to sales decrease

Securities

272.1

275.9

3.8

Inventories

81.5

78.8

-2.7

Noncurrent
Assets

380 4
380.4

387 8
387.8

Investment
Securities

358.7

303.0 -55.7
55.7 Transfer to cash, etc.

Others152.3

102.3 -50.0

Total Assets

3,165.9

3,102.6 -63.3

Iin
i machinery,hi
7.4
74 Increase

equipment, and metal molds,

10Changes in Consolidated Balance Sheet(hundred millions of Yen)
Account(A) Mar 31
31, 2016(B) Jun 30
30, 2016(B) - (A)Remark

112.4

114.7

38.8

26.2

Others156.4

162.3

5.9 Increase in other account payables, etc.

Total Liabilities

307.6

303.2

-4.4

RetainedEarnings,
3,085.3

3,096.2,10.9 Net pprofit 52.9 - Dividend 42.0

-564.5-564.50.0

Valuation
Vl ti
Variance

73.4

71.9

-1.5

Translation
Adjustment

56.9

-12.3
12.3

-69.2
69.2 Due to strong Yen

207.2

208.1

0.9

T t l Shareholders'TotalSh
h ld'Equity

2,858.3

2,799.4-58.9

Total Liabilities andShareholders' Equity

3,165.9

3,102.6-63.3

Not es P ay able andA c c ount P ay able

Income Taxes
PayableTreasury Stocks

Others2.3-12.6 Tax payment

11

Sales Changes by Application (round number) [Consolidated Basis]

400

16%down

FY201510%down

1Q
3%up

FY20161Q
9%down0

Smartphone/Mobile Phone

GeneralIndustrial

DigitalComputerOffice
Automotive Tablet/Consumer
RelatedMachinery
Notebook
Electronics
Equipment
PC*1Communication*2※１

As this is in round number, please be noted thatsome ratio difference may occur. Thank you foryour understanding.

※２*1 Computer Related Equipment – Tablet/Notebook PC notincluded.
*2 Communication - Smartphone / Mobile Phone notincluded.

12

Sales by Application (round number) (Consolidated Basis)

Smartphone/
MobilePhone 30%

(Others 24%)

GeneralIndustrial(FA Controlling 32%Equipment 3%)(Associated Electric
Equipment 5%)

FY2015
1Q

Smartphone/Mobile
Phone 27%

(Others 24%)

(FA Controlling
Equipment 3%)

GeneralIndustrial
31%(Associated Electric
Equipment 4%)(Cable 3%) Communication 6%(Cable 3%)

FY2016
1Q

Communication 6%(Wireless 3%)

Offi Machinery
OfficeM hi2%
Digital Consumer
Electronics 3%
Computer Related
Equipment 4%

Automotive19%*2 ((Wireless 3%))

Office Machinery 3%
Tablet/Notebook
PC 6%Automotive
17%

As this is in round number, please be notedthat some ratio difference may occur. Thankyou for your understanding.

ComputerRelatedEquipment
3% *1Digital
ConsumerElectronics
5%Tablet/
NotebookPC 6%*1 Computer Related Equipment – Tablet/Notebook PC
not included.
*2 Wireless Communication - Smartphone / Mobile
Phone not included.

13

Overseas Production and Sales Ratio
((%))

7072

72

73

66

71

60
50

Overseas4748

45444540

Sales Ratio

Overseas30

Production20Ratio

100
FY2012FY2013

FY2014FY2016 1Q
FY2015 FY2016.1Q

14Capital Investment and Depreciation Change (Consolidated Basis)（hundred millions of Yen）

(%)

140

140120114110118110

118

40.0

111

100

81

CapitalInvestment

30.0

Depreciation

20.0

CapitalInvestment
Ratio

80
60
40
20

9.1
8.8

9.4

9.8

8.7

9.20

FY2013

FY2014FY2015

40

12.5

14 5
14.5

16
7.2

10.0

Depreciation
Ratio

5.8

FY2016(FY2016
Forecast)

FY2016FY20161Q 1Q0.0(*Excluded: Investment in land, building, software)

15

Business Forecast for the Year Ending March 31, 2017 (Consolidated)
We revised the currencyy rate on and after 2Q to 1US$=105Yen ((from 108Yen),), 1€=115Yen(from 120Yen), 100Won=9.20Yen (from 9.30Yen). However, due to estimated sales increase in
Chines smartphone market etc., we will hold the forecast announced on April 28th(hundred millions of Yen)FY2015 (FY ended Mar 31, 2016)
ActualFirst HalfSales(COGS)

Operating
Profit612.3（53.9％）For the Year

1,202.8（54.7％）FY2016 (FY ending Mar 31, 2017)
Forecast
First Half560.0（53.3％）

For the Year

1,120.0

287 9287.9

140 0140.0

270 0270.0(%)

24.9%

23.9%

25.0%

24.1%

RecurringP fit
Profit

167 4
167.4

305 2
305.2

140 0
140.0

280 0
280.0

(%)

27.3%

25.4%

25.0%

25.0%

Net Profit

116.9

211.0

100.0

195.0

(%)

19.1%

17.5%

17.9%

17.4%

Dividend Per Share
Consolidated Dividend
Payout Ratio-

596.31Yen

120Yen240Yen-40.2%-120Yen-

For通期
the YearOver the Previous Actual Amount Over the Previous Actual AmountAmountChange%AmountChange%-52.3-8.5% -82.8

-6.9%

-12.6

-8.4% -17.9-6.2%（53.7％）

152 6
152.6

Income Per Share

第2四半期累計First Half

557.62Yen

240Yen43.0%-27.4
27 4 -16.4%
16 4%

-25.2
25 2-8.3%
8 3%-16.9 -14.5%

-16.0

-7.6%

[Currency rate]
1US$1€
100WonFY2015 Actual FY2016 Forecast Previous

120.14Yen
12014Yen
132.58Yen
10.42Yen

108 0Yen
105.79Yen
10579Yen 108.0Yen
116.75Yen 120.00Yen
9.23Yen 9.30Yen

16