FY2011 First Half Results Meeting
Results for the six months ended September 30, 2011
FY2011 : Year ending March 31, 2012

November 15, 2011

Ryosan Company, Limited

Code : 8140 / Stock listings: Tokyo Stock Exchange (First Section)
URL : http://www.ryosan.co.jp/eng/

Results for FY2011 First Half and Forecasts for Whole Financial Year

Measures for Management Issues in Second Half of FY2011
Topics for 8th Medium-Term Management Plan
Changes in Net Sales by Segment
Supplementary Material
NoticeBusiness forecasts and all statement related to the future contained in thispresentation are based on information currently possessed by our company and on
certain assumptions which we judge to be rational. Actual business performance
may differ greatly depending on a variety of factors. The following is a list of majorfactors:
・Economic conditions in key markets (Japan and the rest of Asia),
rapid changes in consumption patterns and supply-demand balance for products
・Sharp fluctuations in the ¥/$ etc. exchange rate
・Substantial fluctuation in prices in capital markets

An Electronics Systems Coordinator

1Results for FY2011 First Half and Forecasts for Whole Financial Year

Measures for Management Issues in Second Half of FY2011
Topics for 8th Medium-Term Management Plan
Changes in Net Sales by Segment
Supplementary Material

An Electronics Systems Coordinator

2Major Points of Results for FY2011 First Half
Steady advancements despite increased
sales and decreased profit
・ Despite the effect of the Great East Japan Earthquake, expansion of trade rights for the Renesas
Electronics business contributed to net sales of 106.9 billion yen (YOY increase of 0.4%).
・ In terms of profit, business costs increased due to strengthening of sales capability for the Renesas
Electronics business and we recorded increased sales and decreased profit. Operating income was1.5 billion yen (YOY decrease of 55.9%) and net income was 1.1 billion yen (YOY decrease of55.4%).
・ Compared to initial forecasts made at the beginning of the financial year for the first half, net
sales exceeded the forecast by 1.9 billion yen (+1.9%), operating income exceeded by 400 million
yen (+43.1%) and net income exceeded by 300 million yen (+41.5%).

There is uncertainty regarding the effect of flooding in Thailand and the unclear financial prospects for theglobal economy. Therefore, the consolidated business forecast for the whole financial year remains unchanged.
*Reviews will be conducted regarding future changes to business performance. Any changes will be announced
as appropriate.
An Electronics Systems Coordinator

3Overview of Consolidated Results
Unit: ¥ 100 million
FY20101H

FY2011
OfTotal

2H

1,065

1,096

2,161

Gross margin

9990190

SG&A expenses

6465

Operating income

35

Ordinary income
Net income

Net sales

Earnings per share

2H (Forecasts)% Chg.

% Chg.

YoY

YoY％

Of
Total％％％＋0.4

1,230＋12.2

2,300

8.882(17.3)

88(2.2)171

7.4(10.1)

129

6.0

66＋4.169＋6.0136

5.9＋5.02560

2.815(55.9)19(23.3)35

1.5(42.4)

39

29

68

3.2

20(47.2)

21(27.8)

42

1.8(39.0)

25

15

41

1.9

11(55.4)

13(13.9)25

1.1(39.5)¥73.74¥46.11¥119.85¥32.94¥39.60(39.5)Net income

Operating income

2,300＋6.4¥72.54

2H

50

80

1H

2,161
2,000% Chg.
YoY

1,069

Net sales
2,500％

1H (Results)

41

1,94360

40

2530

60
1,500

1,096

1,230

47

1,067401,00028253532201919500875

1,065

1,069203515

FY2009FY2010FY2011 (Forecasts)

1325101191500015

FY2009An Electronics Systems Coordinator

FY2010FY2011 (Forecasts)

FY2009FY2010FY2011 (Forecasts)

4Segment Information by Business Type
Unit: ¥ 100 million

FY20101H

FY2011
1H (Results)

2H

2H (Forecasts)% Chg. YoY

Semiconductors
Electronic
Components
Electronic
Equipment
Ryosan Products(Heat sinks)% Chg. YoY

Sales

6176201,237649％＋5.1770％＋24.2

1,420％＋14.7

Operating income

27184511(58.8)

16(10.3)

28(39.0)

Sales

301

298600278(7.6)

301＋0.9580(3.4)

Operating income

1292210(14.3)

7(27.2)18(19.9)

Sales

113

144258111(2.1)

128(11.2)

240(7.2)

Operating income3592(21.5)

2(60.9)5(44.9)

Sales

32

32

64

30(6.1)29(8.6)60(7.3)Operating income2141(32.9)

2＋5.74(17.7)▲10▲10▲21▲11

Unallocable Operating expenses
Sales

Consolidated% Chg. YoY

Operating income‐▲8▲20％‐

1,065

1,0962,161

1,069＋0.4

1,230＋12.22,300％＋6.435256015(55.9)19(23.3)35(42.4)

An Electronics Systems Coordinator％‐5Consolidated Balance Sheet & Consolidated Statement of Cash Flows
Financial standing

Liabilities

AssetsEnd of Sept., 201145.9 billion yen
Including current
Liabilities of
43.3 billion yen (94％)

Including current assetsof 138.2 billion yen (86％)

115.4 billion yen

Net assets

161.3 billion yen

Net assets/liabilities/net assets
to total assets
Liabilities

Net assets

45.7 billion yen

Net assets to total assets (%)

45.9 billion yen

72.0

71.5117.8 billion yen

115.4 billion yen

End of Mar. 2011

End of Sept. 2011

Major causes for increases/decreases

Cash flow

FY2010First Half

FY2011First Half

(Unit: millions of yen)

Operating CF(4,869)(4,712)

Investment CF

(106)

(382)

Financial CF

1,494

407

Free CF(4,975)(5,094)

Balance of cash andcash equivalents

47,08038,183

An Electronics Systems Coordinator

・ Income before income
taxes and minority interests :・ Increase in notes andaccounts receivable-trade :・ Increase in inventories:
・ Purchase of intangible assets:

1,940 million yen(3,416 million yen)
(3,236 million yen)(219 million yen)・ Increase in short-termloans in foreign currency:

・ Payment of year-end dividends:
・ Repurchase of treasury stock:

2,798 million yen(1,378 million yen)(955 million yen)

6

Trends in Net Income and Dividend per Share(yen)
Net income per share

200

187

Dividend per share
Consolidated dividend payout ratio

82.7%
150

72.1%

71.5%

119

111

66.8%

100
42.7%

80

80

8380

72
60

60
500FY2007

FY2008An Electronics Systems Coordinator

FY2009FY2010FY2011 (Forecasts)
7Trends in Net Income, Total Amount of Dividends, and Acquisition of Treasury Stock(¥100 million)
Net Income

7085%

Total Amount of Dividends
Acquisition of Treasury Stock60

57128%

Concept of an overall distribution ratio

50

5067%

148%

2840

37

226772%30

3920

28272728100174120@¥80
FY2007

@¥80

@¥80

@¥60

FY2008FY20092520@¥60

FY2011 (Forecasts)

FY2010《Trends in Acquisition of Treasury Stock》
FY2007
Amount(\ 100 million)
Number of stocks(10,000 shares)

FY2008FY2009FY2010FY2011(Forecasts)

28.8

22.5--17.0100.0

100.0--100.0

An Electronics Systems Coordinator

8Results for FY2011 First Half and Forecasts for Whole Financial Year

Measures for Management Issues in Second Half of FY2011
Topics for 8th Medium-Term Management Plan
Changes in Net Sales by Segment
Supplementary Material

An Electronics Systems Coordinator

9Measures for Management Issues in Second Half of FY2011 (1)1. For reform of profitability system
・ Despite increased net sales due to expansion of trade rights for the Renesas
Electronics business, profit decreased significantly due to a decrease in thegross margin ratio and an increase in SG&A expenses.

⇒ Enlarge new businesses for new customers⇒ Secure trade rights for customers for whom commercial distribution isundecided⇒ Construct sales systems for individual customers (sales, inventory, logistics, etc.)

・Seek a operating income margin of 3% in FY2013
An Electronics Systems Coordinator

10Measures for Management Issues in Second Half of FY2011 (2)2. Execution of growth strategy themes(1) Enlarge business in growth markets
・China ⇒ Enlarge business with local customers (utilize M&A)
・India ⇒ Attract local customers (set-top box, automobiles)(2) Enlarge business in growth fields
・ In-vehicle electrical components ⇒ Strengthen system for sales promotion toJapanese manufacturers, Korean manufacturers and Chinese manufacturers
・ Social infrastructure ⇒ Grope enlargement of business for major Japanesemanufacturers

An Electronics Systems Coordinator

11Results for FY2011 First Half and Forecasts for Whole Financial Year

Measures for Management Issues in Second Half of FY2011
Topics for 8th Medium-Term Management Plan
Changes in Net Sales by Segment
Supplementary Material

An Electronics Systems Coordinator

12Topics for 8th Medium-Term Management Plan (1)Strategy to expand semiconductor business to Chinese corporations
1. Sales, solutions(1) Strengthen partnership with local design houses*(2) Expand solutions for inverters (micro-computer, etc.) to other application products(Air conditioning ⇒ Refrigerator, condenser, automobile air conditioning, electric vehicles)(3) Active expansion of kit business (semiconductor + electrical components, etc.)(100 million yen)161

2. Customers, fields(1) Automotive manufacturers⇒ Strategy to utilize design houses* that possess advanced technology
Attract customers by proposing solutions for electric vehicles

11679(2) PC/mobile phone manufacturers⇒ Attract customers through camera engines for smartphones and tablet PCs(3) Actively enter new business fields(smart grids, security, LED lighting, welding equipment)
FY2011⇒ Implement caravans for individual regions, uncover new design houses*;currently negotiating solution development and collaboration with other companies

FY2012FY2013*Design house: Company specializing in the design of semiconductors etc.

Seek 16 billion yen in FY2013
An Electronics Systems Coordinator

13Topics for 8th Medium-Term Management Plan (2)Intensive strategy for Korean automotive manufacturers■ Promote projects for entire customers groups (projects include suppliers)
1. Body(1)Implement detailed technical support through close(100 million yen)

100contact with technical staff
69(2) Expand kit sales for analog and power products
46

2. Chassis
・ Construct global technical support system for each31

project and provide total solutions
FY2011

3. Car multi media

FY2012FY2013

FY2015・ Construct support system include support for Android OSSeek 10 billion yen in FY2015
An Electronics Systems Coordinator

14Topics for 8th Medium-Term Management Plan (3)Uncover resources in Taiwan
・Support of low-cost needs of customers
・Increase sales opportunities by enhancing
product lineup
・Develop new markets

LCD module
CPU boardFlash memory
products

Begin handling of Taiwanese manufacturer
products focused on 8 product groups.
Enable supply from each module to finishedproducts, including customization

Camera module
Taiwanesemanufacturer
products

KVM switch

Communication
moduleGPS module
DVD/VCD

Seek 4 billion yen in FY2013
An Electronics Systems Coordinator

15

Results for FY2011 First Half and Forecasts for Whole Financial Year

Measures for Management Issues in Second Half of FY2011
Topics for 8th Medium-Term Management Plan
Changes in Net Sales by Segment
Supplementary Material

An Electronics Systems Coordinator

16Change in Net Sales for Semiconductors (By product)First half of FY2011: Despite a decrease in DRAM for PCs as well as related products, there was anincrease in system LSIs for in-vehicle electrical components as well as related products.
Second half of FY2011: We forecast a continued increase in system LSIs for in-vehicle electricalcomponents as well as related products.
(¥ 100 million)

Memories

1,000System LSIs
Discrete

770

800

569

600

620

7760

4583445
400

617

55649

507

47346

384

392

423

271
200
127

139155

167

180

207

1H

2H

1H

2H

1H

2H (Forecasts)

0FY2009
An Electronics Systems Coordinator

FY2010FY201117

Change in Net Sales for Electronic Components (By product)First half of FY2011：Decrease in mechanical components for game consoles as well as related products.
Second half of FY2011：We forecast an increase in display devices for DSCs, mechanical components forcell phones/in-vehicle electrical components as well as related products.
(¥ 100 million)

Display Devices

400

Power Supplies
Mechanical Components

300

310

293

7166
200

1003028199

209

1H

2H

301

298301278
7988948228262926193

184

169

178

1H

2H

1H

2H (Forecasts)

0FY2009
An Electronics Systems Coordinator

FY2010FY201118

Change in Net Sales for Electronic Equipment (By product)First half of FY2011： Decrease in systems equipment for in-vehicle electrical components as well as related products.
Second half of FY2011： We forecast an increase in system equipment for multi-functional printers as well as relatedproducts.
(¥ 100 million)Systems Equipment

180161

Facilities Equipment

144150

128
120

115

113
137

9060

111
116
89

97

103

99

300

121H

23162H

1H

FY2009An Electronics Systems Coordinator

FY20102822292H

1H

2H (Forecasts)
FY201119

Change in Net Sales for Ryosan Products (By area)
First half of FY2011: Decrease in heat sinks for flat TVs as well as related products.
Second half of FY2011: We forecast a continued decrease in heat sinks for flat TVs as well as relatedproducts.
(¥ 100 million)
Domestic

40.0

Overseas

32.6
30.0

32.0

30.7

29.3

26.3
20.822.6

24.2

20.0

22.9

22.2

20.8
15.1
10.0

5.7

5.4

1H

2H

8.4

9.3

7.7

7.0

1H

2H

1H

2H (Forecasts)

0.0
FY2009An Electronics Systems Coordinator

FY2010FY201120

Change in Net Sales for Domestic/Overseas
First half of FY2011: Decrease in DRAM for PCs as well as related products.
Second half of FY2011: We forecast an increase in DRAM for PCs and display devices for DSC as well asrelated products.
(¥ 100 million)

Domestic

1,500

Overseas (figures in parenthesis
are net sales for the Chinese bloc)

1,230
1,200

9006001,067

1,065

1,096

1,069

875
780
706

693

730

719

299(159)361(210)372(210)366(229)350(213)

1H

2H

1H

2H

1H575300

0FY2009An Electronics Systems Coordinator

FY2010449(246)
2H (Forecasts)
FY201121

Results for FY2011 First Half and Forecasts for Whole Financial Year

Measures for Management Issues in Second Half of FY2011
Topics for 8th Medium-Term Management Plan
Changes in Net Sales by Segment
Supplementary Material

An Electronics Systems Coordinator

22Key Clients《Top 40》《Top 5 (by business)》
Top 1-10
Calsonic Kansei

Top 11-20ADVANTEST
ALPINECASIOCOMPUTERALPS Electric

DENSO

Brother Industries

Clients

HITACHI(alphabeticalorder)

Fuji Film

Mitsubishi ElectricFuji Xerox

NECMamiya-OP

NIKON
OMRON
Panasonic
PIONEER(Top 10)Percentage
Sales of allclients

50%

Top 21-30

ClarionFujitsu
Furuno Electric
JVC KENWOOD
SHARP
TDK
TOSHIBANINTENDOTOSHIBA TEC
Sumitomo Wiring
Systems
Sumitomo ElectricIndustries(Top 20)63%

YAMAHAYAZAKI meterTop 31-40

Semiconductor

Electronic
Equipment

JRC

HITACHI
Mitsubishi Electric
NECNIKONPIONEERDENSO
Fuji Xerox
NECNIKON
Panasonic( Top 5 )50%( Top 5 )55%

Electronic
Components

Ryosan ProductCalsonic Kansei
Mitsubishi Electric
NEC
NINTENDO
Panasonic

DENSO
FANUC
HITACHI
Mitsubishi Electric
Panasonic( Top 5 )26%

( Top 5 )43%

KONICAMINOLTAHOLDINGSMiTAC (T)Panasonic Electric
Works
SAMSUNG Group (K)

SANYO Electric
Stanley ElectricTaiyo Yuden
TAKATAYASKAWA Electric(Top 30)

69%(Top 40)72%* Rank and percentage share are based on results for the first half of FY2011.
* T: Customer in Taiwan, K: Customer in Korea* The blue characters represent the clients for which our sales increased by over 20% from the same period last year.

An Electronics Systems Coordinator(alphabetical order)23

Main Suppliers

COSEL
2.1%
Elpida Memory
2.4%

Othersuppliers
20.1%

Japan Aviation
Electronics
Industry
2.4%

Renesas Electronics
48.5%
Percentage share( By business )ORTUS
TECHNOLOGY
2.5%

Electronic
Equipment
(10%)

NLT
Technologies
2.7%
NEC TOKIN
2.8%

NXP
Semiconductors
3.0%

NEC
6.7%

Alps
Electric
6.8%

ElectronicComponents(26%)

Ryosanproducts(3%)

Semiconductors(61%)* Percentage share is based on sales of supplier’s products for the first half of fiscal 2011.
An Electronics Systems Coordinator24

Current Conditions of Flood Damage in Thailand
1. Internal response・Maintain close contact with offices in Thailand. Establish an emergency headquarters at our head office in order to enable rapid
response to any changes.
2. Subsidiaries in Thailand(1) Trading： Ryosan (Thailand) Co.,Ltd. (located in Bangkok)
・No flooding as of November 14th.
・Office is located on upper floor of building. No concern regarding flooding in the future.
(2) Production: Ryosan Engineering (Thailand) Co., Ltd. (located in Chonburi)
・No flooding as of November 14th.
・Located 60 kilometers east of Bangkok. No concern regarding flooding in the future.
3. Business partners(1) Suppliers・Manufacturing has stopped at some factories which produce electric parts. We forecast that a supply shortage from the end of thisyear and later.
(2) Customers
・Car navigation and DSC customers have experienced direct flooding and face a supply shortage for various components. There isconcern regarding the effect on production.
4. Forecast
・Even if water recedes by the end of this year, the majority of forecasts predict that production will restart from February 2012 at theearliest.
・There is the risk of further flooding and infectious disease. Some manufacturers are considering relocation of factories, including
relocation to other countries.
An Electronics Systems Coordinator25