Third Quarter FY2023

Financial Results

Ushio Inc.
February ９, 2024
* All figures in the material have been rounded down to the nearest billion yen.
* FY2023 starts from April 1st, 2023 through March 31st, 2024.
Copyright © 2023 Ushio Inc., All Rights Reserved

Confidential

Copyright © 2023 Ushio Inc., All Rights Reserved

I'm Asahi, General Manager, Corporate Headquarters of Ushio Inc.
Based on the financial results disclosed on our website earlier today, I would liketo explain the details of our financial results for third quarter of the fiscal year
ending March 31, 2024.
Please refer to page 2.

1

Q3 FY2023 Overview

1. Q3 FY2023 Results: Higher revenues and lower earnings
2. FY2023 Full-year Forecasts: Have revised(Maintaining operating profit and other forecasts
below that line while lowering net sales forecast)Confidential

Copyright © 2023 Ushio Inc., All Rights Reserved

2

Today, I would mainly like to share the two topics listed on the slide.
Q3 results showed a year-on-year increase in sales and a decrease in profits,
and we have revised our full-year forecast of net sales.
In addition, I will also explain the status of the Medium-Term Management Plan
and the strategic partnership with Applied Materials.
Firstly, I would like to explain our Q3 results.
Please move on to page 4.

2

AgendaI.

Financial Results for Q3 FY2023

II. Full-Year Forecasts for FY2023

III. Strategic Partnership with Applied Materials
IV. Supplementary Information

Copyright © 2023 Ushio Inc., All Rights Reserved33Summary of Q3 FY2023 Financial Results
YoY Comparison: +4.1 billion yen (+3.2%）
Net Sales132.5 billion yen

EBITDA*

16.3 billion yen

Profit Attribute to
Owners of Parent

8.6 billion yen- Industrial Processes Business: Sales decreased owing to deteriorating
conditions in semiconductor and flat panel display markets- Visual Imaging Business: Sales rose on higher digital cinema projector(DCP) sales from materials shortage resolution and impact of lower yen

YoY Comparison: -2.9 billion yen (-15.4%)- Although sales were up, EBITDA was down owing to product mix changes
and higher strategic growth investments

YoY Comparison: -3.3 billion yen (-28.0%)
Non-operating Income- Forex gain:
0.2 billion yen (Q3 FY2022: 2.5 billion yen)

* EBITDA=operating profit + depreciation and amortization and amortization of goodwill

Copyright © 2023 Ushio Inc., All Rights Reserved

4

As a summary of Q3 results, net sales increased 3.2% to JPY132.5 billion.
Deterioration of semiconductor and flat panel display markets conditions
continued from the previous fiscal year, and sales in the Industrial Processes
business decreased.
Meanwhile, in the Visual Imaging business, where sales of digital cinema
projector increased as a result of progress in resolving the materials shortages,
sales increased, partly due to positive impact from weakening yen.
EBITDA decreased 15.4% to JPY16.3 billion.
Despite the increase in sales, earnings declined due to changes in product mix
and an expansion in strategic investments for the future.
Quarterly net income decreased 28.0% to JPY8.6 billion, partly due to a decline
in Foreign exchange gains in the previous fiscal year.
The following step-by-step chart explains the details of the increase or decreasein EBITDA.
Please move on to page 6.

4

FY2023 Q3 Summary of Financial Results
Q3 FY2022

Q3 FY2023

YoY comparison
Changes（Billions of yen)

％

128.3

132.5

＋4.1

＋3.2%

Operating Profit*1

13.5

10.2

-3.3

(24.5)%

Operating Margin*1

10.5%

7.7%

(2.8)P-

EBITDA*2

19.2

16.3

-2.9

(15.4)%EBITDA Margin

15.0%

12.3%

(2.7)P-

Ordinary Profit

18.0

12.6

-5.4

(30.1)%

Profit Attributable to
Owners of Parent

12.0

8.6

-3.3

(28.0)%EPS (yen)

101.8176.84-24.97(24.5)%

USD

136

143

＋7

-

EUR

140

155

＋15

-

Net Sales

FOREX (yen)*1 In Q3_FY2023 allocate slight new amortization of goodwill: Operating profit (adjusted) 10.3 billion yen*2 EBITDA=operating profit + depreciation and amortization and amortization of goodwill

Copyright © 2023 Ushio Inc., All Rights Reserved

55YoY Variation Analysis of EBITDA for Q3 FY2023(billions of yen)

19.2

＋0.5

-5.5

FOREX

＋1.6
＋2.9

PHS

LS
(Sales change
impacts)

IP

VI(Sales change
impacts)(Sales change
impacts)

Q3_FY2022
EBITDA
IP = Industrial Processes
VI = Visual Imaging＋0.1(Sales change
impacts)

-0.8

-1.9

(R&D)

16.3

＋0.2

Strategic
Investments

Strategic
Investments

Others(Human capital)

Q3_FY2023
EBITDA▲2.9 billion yen
LS = Life Sciences
PHS = Photonics Solutions

Copyright © 2023 Ushio Inc., All Rights Reserved

6

Here is the main breakdown of the JPY2.9 billion decrease in EBITDA.
Income increased by JPY0.5 billion due to the depreciation of the yen.
Regarding business aspects, due to sales increase and decrease, profits
decreased in the Industrial Processes business but increased in in the Visual
Imaging and Life Sciences businesses.
Regarding non-business aspects, we expanded strategic investments by a totalof JPY2.7 billion for the future.
Next, I will explain the financial results by business segment.
Please refer to page 7.

6

Q3 FY2023 Financial Results by Business Segments(Billions of yen)
Net Sales
Industrial Processes

Total(9.5)%(46.6)%

15.0

8.0

-7.0

(13.3%)((9.3)P)

-

49.6

59.2

＋9.6

＋19.4%＋70.3%

Operating Profit

2.6

4.5

＋1.8

(Operating Margin)(5.4%)(7.8%)(＋2.3P)

-

4.0

4.0

-0.0

(0.6)%-

Operating Profit

-3.9

-1.6

＋2.3

(Operating Margin)((98.7)%)((41.7)%)(＋56.9P)

-

6.7

7.9

＋1.2

＋17.9%-

Operating Profit

-0.1

-0.8

-0.7

(Operating Margin)((1.7)%)((10.7)%)((9.0)P)

-

1.2

0.9

-0.3

(25.2)%-Net Sales
Others

60.3

(%)

-6.3

(22.6%)Net Sales
Photonics Solutions

66.6

YoY Comparison
Changes

Operating Profit

Net SalesLife Sciences

Q3 FY2023(Operating Margin)

Net Sales
Visual Imaging

Q3 FY2022

Operating Profit

-0.1

0.0

＋0.2

(Operating Margin)((13.1)%)(5.6%)(＋18.7P)-

Net Sales

128.3

132.5

＋4.1

＋3.2%

Operating Profit

13.5

10.2

-3.3

(24.5)%(Operating Margin)(10.5%)(7.7%)((2.8)P)-

Copyright © 2023 Ushio Inc., All Rights Reserved

7

Here are the financial results by segment.

The following pages describe the details. Please move on to page 8.

7

Q3 FY2023: Industrial Processes Results(Billions of yen)

YoY Comparison

Q3
FY2022Q3
FY2023

Changes

66.6

60.3

-6.3

Net Sales■Net Sales: Down 6.3 billion yen YoY(%)(9.5)%

Operating Profit

15.0

8.0

-7.0

(46.6)%

Operating Margin

22.6%

13.3%

(9.3)P-

Net Sales by Subsegments
UV Lamps

10.6

10.5

-0.1

(1.0)%OA Lamps

5.1

4.1

-0.9

(19.1)% ③

Optical Equipment Lamps

9.2

8.0

-1.2

(13.4)%(9.3)%

25.1

22.7

-2.3

UV Equipment

25.8

23.8

-1.9

(7.7)% ②

Other Optical Equipment

15.7

13.7

-2.0

(12.8)% ①

Optical Equipment Business

41.5

37.5

-3.9

(9.6)%

Total

66.6

60.3

-6.3

(9.5)%

Light Source Business– Sales of equipment for LCD panel declined owing todecreased demand– Sales of equipment declined owing to curtailed
capital investment reflecting final demand slowdown– Sales declined owed mainly to absence of previous
year’s demand spike①②③■Operating Profit: Down 7.0 billion yen YoY– Profit margins declined owning to lower sales ofhigh-value-added products– Expanded R&D strategic investments in opticalequipment

Copyright © 2023 Ushio Inc., All Rights Reserved

8

In the Industrial Processes business, both sales and profits declined.
Net sales decreased 9.5% to ¥60.3 billion, and operating profit decreased
46.6% to ¥8 billion.
The run-out of stay-at-home demand and the deteriorating market conditions of
final products, such as servers and PCs resulted in a curtailment in related
capital investments. Accordingly, sales of LCD panel related equipment, UV
equipment and light sources decreased.
For operating profits, in addition to the decrease due to lower sales, theoperating margin declined owning to the sales decrease of high-value added
products such as light sources and UV equipment and the expansion of R&D
strategic investments in EUV and UV equipment.

I will explain the results of the Visual Imaging business on page 9.

8

Q3 FY2023: Visual Imaging Results
YoY Comparison

Q3
FY2022Q3
FY2023

Changes

49.6

59.2

＋9.6

＋19.4%

Operating Profit

2.6

4.5

＋1.8

＋70.3%

Operating Margin

5.4%

7.8%

＋2.3P

-

10.9

9.5

-1.4

(13.4)% ③(Billion of yen)

Net Sales■Net Sales: Up 9.6 billion yen YoY(%)

Net Sales by Subsegments
Projector Lamps
Illumination Lamps

2.3

2.4

＋0.1

＋6.5%

Light Source Business

13.3

12.0

-1.3

(9.9)%

Cinema

14.4

23.5

＋9.0

＋63.0% ①

General Imaging

21.8

23.7

＋1.8

＋8.4% ②

Imaging Equipment

36.3

47.2

＋10.9

＋30.1%

Total

49.6

59.2

+9.6

+19.4%– DCP sales benefited from elimination of materials
shortages and rose on replacement demand– Sales increased on an acceptance inspection for alarge deal in Q2 and steady capital investments– Lamp sales decreased owing to shift to solid-state
light sources in projectors for general imaging
applications– Lower yen contributed to sales gains①②③■Operating Profit: Up 1.8 billion yen YoY– Purchasing cost conditions improved on parts prices
returning to normal– Profitability improved from high-end models in generalimaging accounting for a greater proportion of sales– Strategically expanded investments to build solutions
structure

Copyright © 2023 Ushio Inc., All Rights Reserved

9

In the Visual Imaging business, both sales and profits increased.
Net sales increased 19.4% to JPY59.2 billion, and operating profit increased
70.3% to JPY4.5 billion.
Sales of the digital cinema projector grew due to replacement demand in movie
theaters, and in general imaging field, investments in events, amusement parksand other areas were steady and there were a large deal in Q2, resulting in net
sales to increase.
On the other hand, sales of projector lamps declined as the shift to solid-state
light sources accelerated.
Operating profit increased due to the effect of increased sales and the cost ofpurchases normalization thanked from the resolution of materials shortages. In
addition, profitability improved as sales proportion of RGB laser projector in
General Imaging increased. Meanwhile, we expanded strategic investments tobuild a future-oriented solutions structure.
I will explain the Life Sciences business and the Photonics Solutions business on
page 10.

9Q3 FY2023: Life Sciences and Photonics Solutions Results
Life Sciences
YoY Comparison

Q3
FY2022Q3
FY2023

Changes

Net Sales

4.0

4.0

-0.0

(0.6)%

Operating Profit

-3.9

-1.6

＋2.3

-

■Operating Profit: Up 2.3 billion yen YoY(41.7)% ＋56.9P-– Increase came from inventory write-downs recordedin the previous fiscal year and restraint of investment forenvironmental hygiene solutions(Billion of yen)

Operating Margin(98.7)%■Net Sales: Down 0.0 billion yen YoY(%)– Sales decreased in light source for environmental
hygiene solutions

Photonics Solutions
YoY Comparison

Q3
FY2022Q3
FY2023

Net Sales

6.7

7.9

＋1.2 ＋17.9%– Expansion in sales of laser modules for microscopeused for R&D applications

Operating Profit

-0.1

-0.8

-0.7

-

■Operating Profit: Down 0.7 billion yen YoY(1.7)%(10.7)%(9.0)P-(Billion of yen)

Changes■Net Sales: Up 1.2 billion yen YoY(%)– Increased strategic investments in R&D
Operating Margin

Copyright © 2023 Ushio Inc., All Rights Reserved

10

In the Life Sciences business, sales decreased and profits increased.
Net sales decreased 0.6% to JPY4.0 billion, while operating profit increased by
JPY2.3 billion to a loss of JPY1.6 billion.
The sales of Care222 related products for environmental hygiene solutions
declined due to sluggish demand, resulting net sales to decrease.
Operating profit, on the other hand, increased due to the absence of inventory
write-downs that were recorded in Q2 of the previous fiscal year and thecurtailment of investment as a result of changes in strategy.
In the Photonics Solutions business, sales increased and profits decreased.
Net sales increased 17.9% to JPY7.9 billion, while operating profit decreased by
JPY0.7 billion to a loss of JPY0.8 billion.
The increase in sales was mainly due to higher sales of modules for R&D
applications, while operating profit decreased due to strategic expansion ofdevelopment costs and other expenses.
These are the explanations of Q3 results.
I will explain the outlook for the full-year.
Please move on to page 12.

10

I.

Financial Results for Q3 FY2023

II. Full-Year Forecasts for FY2023

III. Strategic Partnership with Applied Materials
IV. Supplementary Information

Copyright © 2023 Ushio Inc., All Rights Reserved

1111Summary of FY2023 Full-Year Forecasts
Revised full-year forecasts to reflect business environment changes (maintaining operating
profit and other forecasts below that line while lowering net sales forecast)⚫ 178.0 billion yen (10.0 billion yen downward revision)
Net Sales- Industrial Processes(¥2.0 billion upward revision)・Higher sales than expected due to better performances in LCD panel related operations and in maintenance- Visual Imaging(¥12.0 billion downward revision)・Lower sales than expected owing to Hollywood strike and deteriorating Chinese economy⚫ 12.5 billion yen (forecast unchanged)- Industrial Processes (¥1.0 billion upward revision)Operating Profit

・ Reflecting higher sales and improved profitability from constraining costs due to accelerated acceptance inspection ofsome UV equipment- Visual Imaging(¥1.0 billion downward revision)

・While lower sales should reduce earnings, profitability should improve on better product mix and swiftly
enhanced materials costs

EBITDA*⚫ 21.0 billion yen (forecast unchanged)

Profit Attributableto Owner of Parent⚫ 10.0 billion yen (forecast unchanged)

FOREX (yen)⚫ Q4 foreign exchange rates: USD=135 yen, EUR＝145 yen* EBITDA=EBITDA=operating profit＋depreciation and amortization and amortization of goodwill

Copyright © 2023 Ushio Inc., All Rights Reserved

12

The full-year forecast for net sales has been revised downward by JPY10.0
billion on a company-wide basis in light of the recent changes in businessenvironment. On the other hand, we maintain forecasts for operating profits andothers below the line as initially planned.
The main revisions are as follows: for net sales forecast, we revised upward by
JPY2.0 billion for Industrial Processes business but downward by JPY12.0 billion
for Visual Imaging business, because, in the Visual Imaging business, theadverse impact on business results from the Hollywood strike and thedeterioration of the Chinese economy should be greater than expected.
Despite the impact of lower profits due to the lower sales in Visual Imaging
business, there should be positive effects of increased sales and improved
profitability in Industrial Processes business. Also, in Visual Imaging business,
product mix and material costs are improving. Accordingly, we maintain theinitial forecast for operating profits.
Please refer to page 13 and 14 for details of figures.
Next, I will explain the revised full-year forecasts by segment with the outlook
for Q4.
Please move on to page 15.

12

FY2023 Full-Year Forecast Revision: Summary(Billions of yen)

Forecasts
on 5/11/2023

Revision

YoY Comparison

FY2022
Results

Changes

Changes(%)

Net Sales

178.0

188.0

-10.0

175.0

＋2.9

＋1.7%

Operating Profit*1

12.5

12.5

-

15.8

-3.3

(21.2)%

Operating Margin*1

7.0％

6.6%

＋0.4P

9.1%

(2.0)P(11.2)%EBITDA*2

21.0

21.0

-

23.6

-2.6

EBITDA Margin

11.8%

11.2%

＋0.6P

13.5%

(1.7)P-

Ordinary Profit

14.0

14.0

-

20.1

-6.1

(30.5)%

Profit Attributable to
Owners of Parent

10.0

10.0

-

13.6

-3.6

(27.0)%EPS (yen)

90.58

90.58

-

115.69-25.11(21.7)%ROE (％) *1

4.3%

4.3%

-

5.7%

(1.4)P

-

50

50

-

50

-

-

USD

141

135

＋6

135

+6

-

EUR

153

145

＋8

141

+12

-

Annual dividend (yen)Forex rate (yen) *3*1 FY2023 operating profit, operating margin and ROE targets exclude new goodwill amortization.
*2 EBITDA = operating profit + depreciation and amortization and amortization of goodwill*3 Forex assumption after Q4: USD=135 yen, EUR=145 yen (Forex results for the first nine months of FY2023: USD =143 yen, EUR=155 yen)
(Reference) Forex sensitivity: Annual impact from 1 yen fluctuation
Copyright © 2023 Ushio Inc., All Rights Reserved[vs USD] Net Sales: Approximately 1.20 billion yen, Operating profit: Approximately 0.13 billion yen

1313

FY2023 Full-Year Forecast Revision: By Business Segments(Billions of yen)

Industrial
Processes
VisualImaging
Life
Sciences
Photonics
Solutions

Total

Forecast​s*1
on 11/6/2023

FY2022
Results

Changes（Reference*2）

YoY Comparison
Changes(%)

Operating Profit

83.0
10.0

81.0
9.0

+2.0
＋1.0

90.0
18.4

-7.0
-8.4

(Operating Margin)(12.0%)(11.1%)(＋0.9P)(20.5%)((8.4)P)

-

90.0
6.5

-12.0
-1.0

68.3
3.2

＋9.6
＋2.2

＋14.1%

Operating Profit

78.0
5.5

(Operating Margin)(7.1%)(7.2%)((0.2)P)(4.8%)(+2.2P)-

Net Sales

4.5
-2.0

-

5.6
-5.1

-1.1
+3.1

(19.9)％

Operating Profit

4.5
-2.0

(Operating Margin)((44.4)%)((44.4)%)-((91.4)%)(+47.0P)

-

10.5
-1.0

-

9.2
-0.2

+1.2
-0.7

+13.4％

Operating Profit

10.5
-1.0

(Operating Margin)((9.5)%)((9.5)%)-((3.2)%)((6.4)P)

-

2.0

2.0

-

1.7

+0.2

+14.1％-Net Sales

Net Sales

Net Sales

Net Sales
Others

Revision*1(7.8)％(45.7)％+67.2％--

Operating Profit

0.0

0.0

-

-0.4

+0.4

(Operating Margin)(0.0%)(0.0%)-((26.9)%)(+26.9P)

-

188.0
12.5

-10.0
-

175.0
15.8

＋2.9
-3.3

+1.7％

Operating Profit

178.0
12.5

(21.2)％(Operating Margin)(7.0%)(6.6%)(+0.4P)(9.1%)((2.0)P)-Net Sales*1 FY2023 operating profit and operating margin targets exclude new goodwill amortization.
*2 FY2022 segment figures are reference values that Ushio prepared for comparative purposes.

Copyright © 2023 Ushio Inc., All Rights Reserved

14

14

FY2023 Full-Year Forecasts : Industrial Processes BusinessYoY Comparison

FY2022
Results

FY2023
Forecasts（Reference*）(Revised)

Changes

Net Sales

90.0

83.0

Operating
Profit18.4

OperatingMargin20.5％(Billions of yen)(%)

Q3
Progress
rates

-7.0

(7.8)％

72.7%

10.0

-8.4

(45.7)％

80.4％

12.0％

(8.4)P－－■Business environment assumptions
Business conditions to remain uncertain overall- In semiconductor market, capacity utilization adjustments should continue
amid end-demand slowdown, although sign of demand recovery has been seen
- Despite investment restraints in market for IC package substrates, demandshould gradually recover from around the latter half of FY2024 and grow overthe medium through long terms- Demand in flat panel display market should remain flat for foreseeable futureowing to lower capacity utilization from stay-at-home demand running its
course■Net Sales: Down 7.0 billion yen YoY* Each segment figures of FY2022 is reference values that Ushio prepared forcomparative purposes

Q4 comments on Q3 progress• Performed in line with full-year forecasts despite moving some UV
equipment acceptance inspections forward to Q3• Optical equipment profitability should decline owning to→ Increased strategic investments (in R&D)
→ Temporarily lowered production owing to deteriorating market
conditions, leading to operational losses- Sales of UV lamps should decrease in reactions to previous year’s robust
market climate- UV equipment sales should decline on acceptance inspection delays frominvestment postponements- Sales of light sources for EUV mask inspections should drop. Although
maintenance revenues should increase, operation could decline owing todeteriorating semiconductor market conditions■Operating Profit: Down 8.4 billion yen YoY- Looking to expand strategic investments (in R&D) to enhance productcompetitiveness- Profitability will probably deteriorate from lower sales of high-value
added products
Copyright © 2023 Ushio Inc., All Rights Reserved

15

Regarding the Industrial Processes business, although both net sales andoperating profit have been revised upward as explained earlier, the full-year
situation remains the same with lower sales and profits compared to theprevious fiscal year.
Although market conditions are showing signs of recovery, there has been no
significant change in the current situation as explained in the last Financial
Presentation, and we expect a decrease in sales and profit due to the impact ofdeteriorating market conditions for semiconductors and flat panel displays.
From the beginning of the fiscal year to Q3, the business has shown steady topand bottom-line growth trend. However, in Q4, the profit margin is expected to
decline due to the impacts of the acceleration of some UV equipment’s
acceptance inspections from Q4 to Q3, the strategic investments in R&D for the
future, and a temporary decline in UV equipment production capacity owing to
the deterioration in market conditions.
The next page describe the latest status of main products.
Please see page 16.

15

FY2023 Main Products of Industrial Processes BusinessCurrent Status（updated）

Sales Transition（updated）■Large Field Stepper for Cutting-Edge IC Package Substrates and Direct Imaging (DI)
Lithography Equipment••

While medium- through long-term growth expansion assumptions for the IC package
substrates market remains unchanged, current downturn in server and PC markets haveprompted related capex spending curtailments.
＝＞ Assuming related market recoveries from H2 FY2024 or beyond: Accordingly, there might
be a temporary downturn in FY2024, demand should bottom out during the year andagain expand
Generative AI uptake and expanding AI-related investments: Efforts to create larger package
substrates and chiplets are accelerating, with advanced package substrate needs increasing＝＞ Business alliance with Applied Materials targets a full lineup of equipment for cutting-edge
IC package substrates■EUV Light Source for EUV Mask Inspection••

Although retaining initial plans for FY2024 and beyond, a near-term deterioration insemiconductor market could hamper performance owing to capacity utilization adjustments;
at same time, we will continue striving to cut total costs of ownership
While progressing steadily with efforts to attract new customers for further advances in EUV
lithography technology (High-NA), adoption expansions should be later than initiallyanticipated

Under Review

DI

Large Field Stepper（UX-5）
FY18

FY19

FY20

FY21

FY22

FY23

FY24

FY25

Forecast

Plan

Plan

Light Source ＋ Maintenance

Under Review

FY18

FY19

FY20

FY21

FY22

FY23

FY24

FY25

Forecast

Plan

Plan

Copyright © 2023 Ushio Inc., All Rights Reserved

16

For UV equipment related to advanced IC package substrates, our latest
understand expects to recover gradually from H2 of FY2024 and after. FY2024
will experience a downturn and sales will decline, which being considered to bea temporary impact, and we expect to grow again after bottoming out in
FY2024.
In addition, through the strategic partnership with Applied Materials released on
December 13, 2023, we will continue to strengthen our product lineup to
respond to future advances in IC packages, and steadily grow our business.
We will explain the strategic partnership with Applied Materials in detail later.
Regarding the light source for EUV mask inspection, we are currently reviewing
the situation for the next fiscal year and after. However, since there is concern
about a drop in capacity utilization in some areas, we will continue to work tominimize the impact on profitability by continuing our efforts to reduce TCO.
In addition, although our efforts to acquire new customers are progressing, we
expect growth expansion through these efforts to be later than expected.
However, we continue to develop products that will meet the need for highvalue-added light source for inspection along with the progress of High-NA.
Next, please see page 17.

16

FY2023 Full-Year Forecasts : Visual Imaging BusinessYoY Comparison

FY2022
Results

FY2023
Forecasts(Billions of yen)

（Reference*）(Revised)

Changes(%)

Q3
Progress
rate

Net Sales

68.3

78.0

+9.6

+14.1％

76.0%

Operating
Profit

3.2

5.5

+2.2

+67.2％

83.6%

OperatingMargin

4.8％

7.1％

+2.2P

－

－

* Each segment figures of FY2022 is reference values that Ushio prepared forcomparative purposes

Q4 comments on Q3 progress•

Cinema sales should decrease from lower demand due to seasonal
factors, content shortages owing to the Hollywood strike, and newinvestment declines amid a worsening Chinese economy•

General imaging sales should be affected by restrained investments
stemming from deteriorating Chinese economy
Increase strategic investments•■Business environment assumptions
While recovering from pandemic and resolving materials shortages, willremain affected by Hollywood strike and worsening Chinese economy- While cinema market investment appetites have recovered and replacement
demand is increasing, facing temporary lower capacity utilizations andinvestment curtailments for movie theaters because of content shortages
owing to the Hollywood strike and new construction restraints owing toChinese economic downturn- In general imaging market, capital investments robust worldwide in eventsand theme parks, but there should be impact from weaker investment
appetites owing to deteriorating Chinese economy■Net Sales: Up 9.6 billion yen YoY- DCP sales should increase on resolution of materials shortages and its
replacement demand despite temporary impact of curtailed investments- General imaging related equipment sales should increase on solid global
demand despite impact of deteriorating Chinese economy- Sales of projector lamps should decline amid shift to solid-state lightsources■Operating profit: Up 2.2 billion yen YoY- Profitability should improve on sales growth and gains from supply chain
management reforms and easing of materials shortages- Aiming to expand strategic investments to build solutions structure
Copyright © 2023 Ushio Inc., All Rights Reserved

17

In the Visual Imaging business, although net sales and operating profit havebeen revised downward, the full-year situation remains the same with higher
sales and profits compared to the previous fiscal year. In Cinema, we can
expect a stable demand for replacement at movie theaters. Demand in General
Imaging is also expected to remain strong as demand for advanced video
production continues.
In Q4, sales and profits are expected to decrease compared to Q3 due to theimpact of the Hollywood Strike and the deteriorating Chinese economy, in
addition to the lower demand due to the seasonal factors in Cinema.
Detailed information on the latest status of Cinema and General Imaging isavailable on page 18. Please read them later.
As for the Life Sciences business and Photonics Solutions business, there are nochanges from the initial plan, so please refer to page 19 later.
Then, please move on to page 20.

17

FY2023 Visual Imaging Business Markets
Markets

Current Status（updated）••

Cinema••Cinema market operating rates have generally recoveredfrom COVID-19 pandemic
Resolved previous term’s materials shortages and purchasing
costs have normalized
Despite near-term impact of Hollywood strike and deteriorating
Chinese economy, DCP replacement should stay stable in
FY2024 and beyond
Continuing to focus on value-added cinemas and boosting salesof high-value-added RGB models

Projector Sales Transition（updated）
RGB laser

Impact of COVID-19 andmaterials shortages

FY19

FY20

FY21

RGB laser•

General Imaging•••

Applications expanding for complex large-scale productions at
events, theme parks and other locations
Investments tending to rise for cutting-edge imaging production
In high-end segment, the ratio increasing for high-value-added
RGB models, such as those incorporating new technologies
Currently monitoring impact of reduced investment appetites
owing to worsening Chinese economy

Lamp type

FY19

FY20

FY21

FY22

FY23

After

Forecast

FY24

Lamp＆LaPh

FY22

FY23

FY24

Forecast

Plan

Copyright © 2023 Ushio Inc., All Rights Reserved

18

18

FY2023 Full-Year Forecasts : Life Sciences/ Photonics Solutions BusinessLife Sciences Business

Comments on Q4 (against Q3 progress rates)

FY2022
Results

FY2023
Forecasts(Billions of yen)

（Reference*）(Revised)

Changes

Net Sales

5.6

4.5

Operating
Profit-5.1-2.0

OperatingMargin(91.4)％YoY Comparison(%)

Q3
Progress
rate

-1.1

(19.9)％

89.2%

+3.1

－

－

- Sales are sluggish. Aims to expand strategic investments as planned.

■Business environment assumptions
Moderate demand growth for light-based equipment inmedical sector■Net Sales: Down 1.1 billion yen YoY- Sales to decline amid strategy change in environmental hygiene solutions■Operating profit: Up 3.1 billion yen YoY(44.4)%+47.0P－－YoY Comparison(%)

Q3
Progressrate

Photonics Solutions Business
FY2022
Results

FY2023
Forecasts- Expected to increase by decline in inventory write-downs in the previous
year and reduction of sales investment for environmental hygiene
solutions

Comments on Q4 (against Q3 progress rates)(Billions of yen) （Reference*）(Revised)

Changes

Net Sales

9.2

10.5

+1.2

+13.4％

75.5%

Operating
Profit

-0.2

-1.0

-0.7

－

－

OperatingMargin(3.2)％(9.5)%(6.4)P－－- Sales are solid. Aims to expand strategic investments as planned.

■Business environment assumptions
Steady growth from shift to solid-state light sourcesand enhanced energy efficiency■Net Sales: Up 1.2 billion yen YoY- Anticipating higher sales of devices and modules including for medical
health, industrial sensors.

■Operating profit: Down 0.7 billion yen YoY- Aims to expand R&D investment for photonics applications.

* Each segment figures of FY2022 is reference values that Ushio prepared for comparative purposes

Copyright © 2023 Ushio Inc., All Rights Reserved

19

19

Shareholder Returns
Dividends (yen)Dividends payout ratio【Dividend policy】
Generating stable returns

Dividends
per Share

50 yen for FY2023

47.8

43.2

35.5
27.8

30.3

30.2

50

50

50

50

FY21

FY22

FY23
plan

(continuation from FY2022)【Buyback policy】

Share
Buybacks

55.2

56.3

47.2

24

26

26

26

FY14

FY15

FY16

FY17

FY18

26

26

FY19

FY20

Steady progress of treasury shares purchase

30.00
30.00

Ushio will flexibly repurchase shares

Status of purchase of treasury shares of January 31, 2024

It will limit treasury stock holdings to 5% of the total
number of issued and outstanding shares, annuallyretiring portions exceeding the 5% threshold

Total amount of purchased: 24.45 billion yen

Announcement on May 11, 2023
Purchase period: May 29, 2023 to May 10, 2024
Total amount to be purchased: 30.0 billion yen (max)Total number to be purchased: 20.00 million shares (max)Total number of purchased: 12,789 thousand shares(billions of yen)

7.80
5.00

2.66
0.09
FY14

FY15

1.20
FY16

0.00
FY17

2.16
FY18

FY19

0.00

0.00

FY20

FY21

FY22

FY23
plan

Copyright © 2023 Ushio Inc., All Rights Reserved

20

Shareholder returns have not changed since the announcement at the beginningof the fiscal year, and we plan to pay a dividend of JPY50 per share.
In addition, as of the end of January, share buybacks are progressing well as it
had reached JPY24.4 billion, representing a progress rate of approximately 82%.
For more details, please refer to the release dated February 2.

20

Medium-Term Management Plan
■Current status
・Chronically stagnant server and PC-related markets resulted in curtailed related capital investments,
so current climate for UV equipment for IC package substrates has become adverse

・In light of these business climate changes, currently reviewing medium- through long-term growthstrategies under the new management structure■Future direction
・Confirm business impact of near-term deterioration in conditions
・Create growth strategy based on medium- through long-term IC package market environment
and the strategic partnership with Applied Materials
・Restructure business portfolio strategy
・Enhance capital efficiency alongside growth strategy and verify path to price-to-book ratio
exceeding 1x
We will report on results of the first year of our Medium-Term Management Plan and of ourreview by when we announce our full-year financial results
Copyright © 2023 Ushio Inc., All Rights Reserved

21

Finally, I would like to explain the status of our Medium-Term Management Plan.
As we've reported so far, the current climate for UV equipment for IC package
substrates is severe due to changes in the semiconductors market and otherenvironmental conditions. We expect the market to gradually recover from theH2 of FY2024, but based on the latest business climate, we are reviewing our
medium- to long-term growth strategy under the new management structure
we recently announced.
We are working on to report the review outcome along with results of the firstyear of our Medium-Term Management Plan at the time of announcing our fullyear financial results.
In addition to confirming the impact of the recent changes in the businessenvironment on our performance, we are restructuring our growth strategy in
the IC package substrate market, which is expected to grow and expand overthe medium- to long-term, in light of the strategic partnership with Applied
Materials.
At the same time, we are restructuring our business portfolio strategy.
We verify the path to improve capital efficiency and achieve a P/B ratio of over
1x, which is one of the goals of the current Medium-Term Management Plan, in
conjunction with our growth strategy.
This is the end of our explanation of the financial results. Today, I would like totalk about some overview of the strategic partnership with Applied Materials,
which was released in last December, as supplement.

Please move on to page 23.
21

I.

Financial Results for Q3 FY2023

II. Full-Year Forecasts for FY2023

III. Strategic Partnership with Applied Materials
IV. Supplementary Information

Copyright © 2023 Ushio Inc., All Rights Reserved

22

22Strategic Partnership with Applied Materials■Reason for Business Alliance
Combining Ushio’s more than 20 years of experience developing and manufacturing lithographyequipment for packaging applications with Applied Materials’ new Digital Lithography
Technology will make it possible to provide solutions for these technical challenges. Ushio willleverage this strategic partnership to fortify its business foundations as a top lithographyequipment manufacturer in this substrate market while reinforcing its product portfolio
expansion strategies in line with its roadmap over the medium through long terms to further
expand the growth of its core Industrial Processes field during that timeframe.

Reference: ”Ushio and Applied Materials Form Strategic Partnership to Develop Next-Generation Lithography Technology for Advanced Semiconductor Packaging Market”(Released on December 13, 2023)

Copyright © 2023 Ushio Inc., All Rights Reserved

23

The strategic partnership with Applied Materials aims to fortify our businessfoundations as a leading company in lithography equipment in the cutting-edge
IC packaging substrates market, and to further expand the growth of Industrial
Processes, our core business, over the medium- to long-term.

23

Strategic Partnership with Applied Materials■Role of Applied Materials and Ushio under the Partnership- Applied Materials
・ Pioneered the technology behind the DLT system
・ Brings 30 years of display experience, unmatched expertise in large substrate processing andindustry’s broadest portfolio of Heterogeneous integration technologies＝＞Will be responsible for R&D and collaboration with Ushio for a definition of a scalable roadmap for the
cutting-edge IC package substrates market, where expected to grow, to enable continued innovation inadvanced packaging to 1-micron and beyond- Ushio・ Brings decades of experience building lithography systems for the cutting-edge IC package substrate applications(more than 4,000 equipment for such applications are delivered worldwide)＝＞ Will leverage its mature manufacturing and customer-facing infrastructure to accelerate adoption of
Lithography Equipment / Solutions with the DLT system
Copyright © 2023 Ushio Inc., All Rights Reserved

24

Ushio’s role in the strategic partnership will be to jointly research and develop
lithography equipment for cutting-edge IC package substrates based on the
Digital Lithography Technology owned by Applied Materials, and then to draw on
our manufacturing technology and customer infrastructure to establish andexpand the business.
Following the signing of the contract last November, we firstly transfer
operations from Applied Materials and build our manufacturing line, as well aswork on order-receiving activities for a new product lineup.

24

Strategic Partnership with Applied Materials■How Digital lithography technology (DLT) works?
- ”maskless” lithography technology

How DLT technology works (image)Light Source
Customer Design File

• Enables transfer of a pattern directly onto asubstrate without a photomask• No field-size limitations

Computation
Infrastructure- Multiple innovations that enable high resolution
and high definition

Digital Micromirror
Device• Advanced computation infrastructure provides
enhanced control over the light that patterns thesubstrate＝＞Dramatically improves yields by adjusting for
substrate distortions and die-placement errors

MirrorAdvanced
Substrate
Copyright © 2023 Ushio Inc., All Rights Reserved

25

The Digital Lithography Technology owned by Applied Materials incorporates
advanced data-processing technology into a conventional direct imaging
lithography system.
Using this technology, patterns for high-level package substrates can beprocessed with adjusting distortion and die alignment errors. Thus, this is arevolutionary technique that realizes high-level resolution processing anddramatically improves yields while maintaining conventional productivity

25

Strategic Partnership with Applied Materials■ Cutting-Edge IC Package Substrates Roadmap- Bigger Chips and HI*1 as AI progresses
panel＝＞Drives larger packages with more functionality＝＞Advanced packages require substrate innovation

wafer（New materials (glass) and sizes (panel)）■Issues with the current lithography technologies- Optical steppers
・For larger field size
→ shot size limitation→ stitching required＝＞Deterioration in yield ratio and tact

- Direct imaging systems*2
・Low resolution for advanced substrates
・Not capable of high throughput*1: Heterogeneous Integration*2: Direct imaging systems without DLT technology

Source: Applied Materials, Jefferies
Copyright © 2023 Ushio Inc., All Rights Reserved

26

We believe that demand for more advanced and larger IC package substrates
will increase in the future as chips get larger and heterogeneous integration
progress more, along with growing demand for IC package substrates forgenerative AI. We also believe that substrate innovation will progress foradvanced packages.
Accordingly, new technological innovations are required to meet these evolution,and lithography equipment with the Digital Lithography Technology can offer
proposals suited to these needs.
In addition, for the technological evolution explained, there are challenges forexisting optical steppers and direct imaging systems as described on the slide,and these can be solved by the lithography equipment with the Digital
Lithography Technology.

26

Strategic Partnership with Applied Materials■Product Portfolio (image)
Advanced

Resolution

Packaging
Wafer

Panel

Increasing I/O count

End Application
HPC/ Data
centerMobility/ PC

DI
＜１um

DI

DI

DI

（with DLT）

（with DLT）

５um
DI

IOT/ Edge

Stepper

＞10um

（ADT）

USHIO
DI
（ADT）

Copyright © 2023 Ushio Inc., All Rights Reserved

27

Through this business alliance, lithography equipment with the Digital
Lithography Technology will be newly added to our product lineup. Each of them,including existing lithography equipment, has its own characteristics, and bystrengthening our lineup, we will be able to cover all directions for the future
evolution of IC package substrates.
The areas covered by each product are shown on the slide, and we aim to growour business by expanding our target areas through these products.
This concludes my explanation.

27

I.

Financial Results for Q3 FY2023

II. Full-Year Forecasts for FY2023

III. Strategic Partnership with Applied Materials
IV. Supplementary Information

Copyright © 2023 Ushio Inc., All Rights Reserved28

28

(New) Business Segments and Main Products
New Business
Segment

Main Products

Industrial
Processes

Light Source:
UV lamps, OA lamps, Opticalequipment lamps, etc.
Equipment:
UV Equipment, Curing
equipment, EUV light source formast inspection, Maintenanceservice etc.

VisualImaging

Life Sciences

Photonics
SolutionsLight Source:
Cinema lamps, Data projector
lamps, etc.
Equipment:
Digital cinema projectors,
projectors for general imaging,
Peripheral equipment,
Maintenance, etc.
Light Source: Care222 related
products
Equipment: UV Medical Devices,etc.
Light Source: Solid-state lightsources (Laser Diode/LED)

Product Examples（提供：TNO）

UV lamps

OA lamps

Cinemalamps

Data projector
lamps

Devices using “Care222,”
Filtered Far UV Technology

Solid-state lightsources (LD/LED)

Large filed
steppers

Digital cinema
projector

Direct imaging
lithography equipment

Projectors forgeneral imaging

LED walldisplay

EUV light source for
EUV mask inspection

Peripheral
equipment

UV Medical Devices“TheraBeam series”

Laser module
Copyright © 2023 Ushio Inc., All Rights Reserved29

29Reference: Reporting Segment Changes
Old Business
Segments

Light Source Business

New Business
Segments

Light Source
Business isdivided into 4
segments

Industrial Processes

Visual Imaging

Optical Equipment
Business
PartialPartialMost of Imaging
Equipment Business is
into Visual Imaging

Life Sciences

Imaging Equipment
Business
OthersMost of Optical
Equipment Business is
into Industrial Processes

Photonics Solutions
PartialOthersPlease refer associated chart on slide 31-32
Copyright © 2023 Ushio Inc., All Rights Reserved30

30Reference: Reporting Segment Changes (including subsegments)
Old business segments
ReportingSegments●OA

Halogenlamps●Illumination●Others●UV lamps

Light Source
Business

Discharge
lamps

Others●OA lamps●Data projector lamps●Optical equipment●Projector lamps●Solid state light sources●Illumination lamps●UV equipment●Cinema projectors●Cure equipment●Genera imaging projectors●General imaging●Lighting equipment, etc.
●Machinery for industrial use and others

One for one transition

Breakdown or consolidation neededLight Source
Business

Industrial Processes
Optical Equipment
Business

Light Source
Business

Visual Imaging●Others●Cinema

Reporting segments●Optical equipment lamps●UV equipment●Others

Imaging
Equipment
Business

Subsegments●UV lamps●Cinema lamps●Optical Equipment lamps

OpticalEquipment
Business

New business segments

Subsegments

Imaging
Equipment
Business●Life sciences productsLight Source
Optical Equipment

Life Sciences●Solid state light sources

Light Source
Business

Photonics Solutions

Optical Equipment
Business

Others●Others

Copyright © 2023 Ushio Inc., All Rights Reserved31

31

Reference: Reporting Segment Changes (including subsegments)
Old business segments
ReportingSegments●OA

Halogenlamps●Illumination●Others●UV lamps

Light Source
Business

Discharge
lamps

Others●OA lamps●Data projector lamps●Optical equipment●Projector lamps●Solid state light sources●Illumination lamps●UV equipment●Cinema projectors●Cure equipment●Genera imaging projectors●General imaging●Lighting equipment, etc.
●Machinery for industrial use and others

One for one transition

Breakdown or consolidation neededLight Source
Business

Industrial Processes
Optical Equipment
Business

Light Source
Business

Visual Imaging●Others●Cinema

Reporting segments●Optical equipment lamps●UV equipment●Others

Imaging
Equipment
Business

Subsegments●UV lamps●Cinema lamps●Optical Equipment lamps

OpticalEquipment
Business

New business segments

Subsegments

Imaging
Equipment
Business●Life sciences productsLight Source
Optical Equipment

Life Sciences●Solid state light sources

Light Source
Business

Photonics Solutions

Optical Equipment
Business

Others●Others

Copyright © 2023 Ushio Inc., All Rights Reserved32

32Industrial Processes: Semiconductor process and Ushio’s involvement
Front-end process

Back-end process

Mounting process

High
Technology

Light source for EUV mask inspection

Steppers (projection lithography)

High earnings model driven by
expansion of maintenancebusiness over the medium term

Lithography equipment for cuttingedge IC package substrates

World share

90％*

Pioneer in FC-BGA volume-output
lithographic equipment*Cutting-edge IC package
substrate market(Stepper market)

Wafer lithography equipment
MEMS, power semiconductor,
and RF device share at 50%<
Retaining competitive advantage
in customer productivity
UV lamps for semiconductor lithography
World share
Used in i-line and g-line lithographyequipment％

75

Stable replacement demand

Direct imaging lithographic equipment
Volume production of high-productivity
lithography equipment for mid/highend substrates at ADTEC Engineering(group company)

World share

50％**IC package
substrate market(DI market)

Copyright © 2023 Ushio Inc., All Rights Reserved33

33Industrial Processes: EUV Light Source for EUV Mask Inspection

EUV light source for nextgeneration semiconductor
mass-production process
Development, Production, Sales

Sales of lightsourceMaintenance

Mask Inspection equipment
manufacturer/
Research & development
institution

Semiconductor device
manufacturers
Increase EUV light source needs forinspection and development

Next-generation semiconductor
mass-production needs with EUV
lithography technology evolution（Provided by TNO）

Ushio EUV Light Source Development History■Ushio Strength

2000
2001
2013
2016
2018

Long business experiencein semiconductor industry

EUV light source development started
Established EUVA*
Withdrew from Lithography related development
Delivered EUV light source to TNO
Delivered first EUV light source for inspection（for test purpose)2019 Delivered and received first acceptancefor mass production process* Extreme Ultraviolet Lithography System Development Association

Contribution of
Ushio’s EUV light source

Expect to expand business opportunities of
EUV light source for mask inspection＋
Many years of experiencein EUV technology(Compact/High-brightness/High Power)
Copyright © 2023 Ushio Inc., All Rights Reserved34

34

Industrial Processes: UV Equipment for Cutting-edge IC Package Substrates
Advanced & Next generation
package demand expansion

Large Field Stepper（UX-5）
Production and sales

Equipment
Sales

Package substrate
manufacturer■World wide share:
Maintain 90％*

■Ushio Strength*Cutting-edge IC package substrate
market (Stepper market)

１．Large-area projection

Chip MountingServer Installed→ High productivity & low CoO

With IoT evolution, demand increased forservers for data centers processing highcapacity and high speed data processing
Data center market>20％ growth per year (self-survey）⇒ Expanding Adoption of
next-generation package substrates

CPU（Server）

２．Non-contact mask work
→ Yield enhancement

３．Deep depth of focus

High
Bandwidth
memoryGPU（AI）→ Process margin & substrate warping

４．High Resolution/alignment accuracy→ Pitch miniaturization & process margin
Copyright © 2023 Ushio Inc., All Rights Reserved35

35Industrial Processes: Direct Imaging (DI) Lithography Equipment
Print-wired board demand increasing
as application innovation

As 5G progressed
Innovation of each application and demand increasing

Direct Imaging
Print-wired board
Board
Package substrate Mounting
Lithograph Equipment Equipment
Sales
Development・Production・Sales

manufacturer

Refinement

High Density

High
Productivity

Data Center
Base Station
Lower
Power
Consumption
Downsizing

Multi-layering■Ushio Strength

Demand increasing

Smartphone
Communication
DeviceDemand increasing

5G Service
Started andexpandingaround the world

VehicleInstallation
Demand increasing

High Resolution (High end products)
World’s fastest High Productivity(Middle end products)＋●World wide share：50％*

Customer-first maintenance support capability*IC package substrate market (DI market)
Copyright © 2023 Ushio Inc., All Rights Reserved3636Reference: Summary of Quarterly Financial Results
FY2022

FY2023

YoY Comparison

Q1

Q2

Q3

Q4

Q1

Q2

Q3

39.7

48.2

40.4

46.6

39.2

45.7

47.5

＋7.0

＋17.6%

Operating Profit

4.4

5.6

3.4

2.3

2.0

2.9

5.2

＋1.8

＋53.3%

Operating Margin

11.3%

11.7%

8.5%

5.0%

5.2%

6.4%

11.0%

＋2.6P

-

EBITDA*

6.3

7.6

5.3

4.3

3.9

5.0

7.3

＋2.0

＋37.6%EBITDA Margin

15.9%

15.8%

13.2%

9.4%

10.1%

11.0%

15.5%

＋2.3P

-

Ordinary Profit

6.2

7.3

4.3

2.1

2.8

3.4

6.3

＋1.9

＋43.9%

Profit Attributable to
Owners of Parent

3.8

5.6

2.5

1.6

1.7

2.4

4.4

＋1.8

＋72.8%EPS (yen)

32.18

47.87

21.80

13.78

15.36

21.65

40.72

＋18.92＋86.8%

USD

127

137

144

133

136

144

149

＋5

-

EUR

137

140

144

143

148

158

159

＋15

-

(Billions of yen)

Net Sales

FOREX (yen)Changes(%)* EBITDA = operating profit + depreciation and amortization and amortization of goodwill
Copyright © 2023 Ushio Inc., All Rights Reserved37

37Reference: Summary of Quarterly Financial Results by Business Segments
FY2022(Billions of yen)

Industrial
Processes
VisualImaging
Life
Sciences
Photonics
Solutions

Net Sales
Operating profit
Operating Margin
Net Sales

19.8

FY2023
Q3

27.5

Q4*

19.3

23.3

Q1

Q2

17.4

YoY Comparison
Q3

20.3

Changes

22.5

(%)

＋3.2

＋17.0%(1.2)%

3.9

6.9

4.1

3.3

2.2

1.7

4.0

-0.0

19.8%

25.4%

21.4%

14.5%

12.9%

8.4%

18.1%

(3.3)P

-

15.5

16.6

17.4

18.7

17.6

21.2

20.3

＋2.9

＋17.0%＋151.9%

1.2

0.8

0.6

0.5

0.6

2.3

1.5

＋0.9

Operating Margin

7.8%

5.2%

3.6%

3.1%

3.5%

11.2%

7.8%

＋4.2P

-

1.4

1.3

1.2

1.5

1.3

1.3

1.3

＋0.0

＋7.0%
-

Net Sales
Operating profit
Operating Margin
Net Sales

-0.6

-2.1

-1.1

-1.1

-0.4

-0.7

-0.4

＋0.6

(47.5)%(158.3)%(93.3)%(73.0)%(32.7)%(57.1)%(36.1)%＋57.2P

-

2.3

2.3

2.0

2.5

2.5

2.5

2.8

＋0.8

＋39.2%-

Operating profit

0.1

-0.0

-0.1

-0.1

-0.3

-0.3

-0.1

＋0.0

Operating Margin

6.1%(3.0)%(9.1)%(7.1)%(12.9)%(14.9)%(5.0)%

＋4.1P

-

0.4

0.4

0.3

0.4

0.2

0.3

0.3

-0.0

(8.7)%-

Operating profit
Operating Margin
Net Sales

Total

Q2

Operating profit

Net Sales

Others

Q1

Operating profit
Operating Margin

-0.1

-0.0

-0.0

-0.3

-0.0

-0.0

0.1

＋0.1

(26.5)%(3.5)%(6.1)%(63.5)%(22.9)%(16.7)%

51.7%＋57.9P

-

39.7

48.2

40.4

46.6

39.2

45.7

47.5

＋7.0

＋17.6%

4.4

5.6

3.4

2.3

2.0

2.9

5.2

＋1.8

＋53.3%

11.3%

11.7%

8.5%

5.0%

5.2%

6.4%

11.0%

＋2.6P

-

* Segment figures are reference values that Ushio prepared for comparative purposes.

Copyright © 2023 Ushio Inc., All Rights Reserved38

38

Cash Allocation Strategy
Strategy from FY2023 through FY2025:
Endeavor to enhance capital efficiency through in-house stock investment and major growth investment allocations
Cash generation

Cash inflows

Cash outflows

Interest-bearing
debt¥40.0 billion+¥40.0 billion+• Operating cash flow under medium-term management plan: ¥60.0 billion over three years• Asset sales: ¥15.0~¥20.0 billion• Interest-bearing debt usages: ¥40.0 billion+ α (Lower cost of capital)
Strategic
investments

Capital allocations• Strategic investments: ¥40.0 billion+

Growth investments (including M&A): ¥40.0 billion+• Financial position

Equity ratio: At least 60%• In-house stock investment + dividends: ・ Stable dividends
・ Undertake in-house stock investment, factoring in
Around ¥70.0-¥90.0 billion over threebusiness performance and financial position (Resolved
to set aside 30.0 billion yen for share repurchases inyears
the first year)

Asset sales¥15.0～¥20.0
billionOperating cash
flow under
medium-term
management plan
¥60.0 billion

In-house stock
investment +dividends¥70.0～90.0
billionTarget ROE of at least 8% by FY2025
Copyright © 2023 Ushio Inc., All Rights Reserved39

39Reference: Sales Ratio by Region
Others0.8%

Q3_FY2022
Net Sales
128.3
billion yen

Q3_FY2023
Net Sales
132.5
billion yen

JapanNorth America

Asia

Europe

21.1%

25.9%

45.5%

6.7%

Japan

North America

Asia

Europe

21.9%

28.0%

41.1%

8.4%
Others0.6%

Copyright © 2023 Ushio Inc., All Rights Reserved4040Reference: R&D Expenses/Capital Expenditures and Depreciation
R&D Expenses（Billions of yen）
Ratio of R&D Expenses to net sales (%)

Capital Expenditures (Billions of yen)
Depreciation (Billions of yen)

8.5

11.0
7.9
7.1

6.1
10.1

6.4

10.1

10.0

10.5

6.5

14.0

11.4
Q3
Results

7.9
6.7

8.9

8.2
7.1

6.86.9

7.3

6.9

FY18

FY19

FY20

FY21

9.4

FY22

FY23

Plan

Q3
Results
Q3
Results

Q3
Results

8.5

8.5
7.6

FY18

FY19

FY20

FY21

H1
ResultH1
Result6.4 5.6

7.2 6.0

FY22

FY23
Plan

Copyright © 2023 Ushio Inc., All Rights Reserved41

41

Reference: Balance Sheet
Asset

56.0

64.2

38.0
5.5

38.4
2.5

-0.4 Marketable Securities+2.9 Notes and AR (Trade)

26.2+0.1 Property, Plant and Equipment

50.6

50.4

323.6
36.2
17.1

341.8
24.3
35.2
44.4

-1.8

Notes and AP-0.9 Other Current Liabilities+27.3 Long-term Liabilities+2.2 Other Current Assets

12.0

9.7

-8.2 Cash and Bank Deposits+18.2+11.7 Inventories

95.1

83.4

Changes(Billion of yen)

+18.2

341.8

323.6

Liabilities/Total Net Equity

Changes(Billion of yen)

244.1

237.8

2023/32023/12-6.2

Total Net Equity

Intangible Assets+9.7 Investments and Other Assets

74.6

84.4

2023/32023/12

Turnover (months)

2023/32023/12

Receivable-trade

2.5

2.6

Inventories

5.1

6.1

Cash Conversion Cycle

6.0

7.0

Equity Ratio (%)

2023/32023/12

75.4

69.6

Copyright © 2023 Ushio Inc., All Rights Reserved4242Reference: Cash Flow
(Billions of yen)
21.6

14.5

11.5

11.0

8.5 8.8

6.6

13.0

15.8

16.1

5.5

4.3

2.7

1.1

0.8

0.7

-0.3
-1.1

FY2018FY2019FY2020 -0.7
-3.4

-3.9

FY2021

FY2022

-5.5
-10.6

-20.3
-26.8

Operating Profit

Sales CFInvestment CF

Finacial CF

Free CF
Copyright © 2023 Ushio Inc., All Rights Reserved

43

43

GlossaryAI

Artificial Intelligence

APMI

Actinic Patterned Mask Defect Inspection

BGA

Ball Grid ArrayCoO

Cost of Ownership

CPU

Central Processing Unite

DCP

Digital Cinema Projector

DI

Direct Imaging

EUV

Extreme Ultraviolet Radiation

FPD

Flat Panel Display

GPU

Graphic Processing Unit

IoTInternet of Things

OA

Office AutomationTNO

The Netherlands Organization of Applied Scientific Research

UV

Ultraviolet

5G

5 th Generation

Copyright © 2023 Ushio Inc., All Rights Reserved

44

44Renewed IR Website/ IR Mail Distribution Feature➢ Our official website "Investor Relations Information" has been renewed.
We have reorganized the contents to make it more accessible and to let you know about Ushio's present to future.
➢ We added new feature “IR E-mail distribution” to send our IR information in a timely manner to the shareholders. Please
register for this feature.

Opened “To our individual shareholders” pageSet up new contents “Ushio in Life”

Added IR E-mail distribution feature

Please registerfrom here

Copyright © 2023 Ushio Inc., All Rights Reserved45

45

<Disclaimer>This report contains forward-looking statements, including earnings forecasts,
which are based on information currently available to the Company and on
certain assumptions deemed to be reasonable. Please be advised that actual
results may differ substantially from those forward-looking statements due tovarious factors.

Copyright © 2023 Ushio Inc., All Rights Reserved

46

46

Contact:
Investor Relations Section
Corporate Communication Department
Ushio Inc.
Email: ir@ushio.co.jp
https://www.ushio.co.jp/en/ir/

Copyright © 2023 Ushio Inc., All Rights Reserved

4747