Business Results of Third Quarter,
FY2016Creative Links to World Electronic
Jan 31st, 2017
HiHiroseElElectrict i Co.,LtdC 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 to differ
materially from those discussed in the *forward-looking
statements. Thank you for
f 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 operations
operations, financialperformance, events or conditions. These statements are based on management’s assumptions andbeliefs in light of the information currently available to it.

2Business Situation of 3Q FY2016[1Q FY2016 (Apr – Jun)]•Smartphone market orders had slightly exceeded expectation for Chinese market, etc. Automotivemarket trend was stable. Industrial market sales started weak, but ended with a upward trend.

[2Q FY2016 (Jul – Sep)]•Total increase in sales from 1Q. Smartphone market trended well in Chinese market, etc. Automotivemarket was sluggish in overseas but good in domestic market. Industrial market increased slightly.

[3Q FY2016 (Oct – Dec)]•Althoughg Automotive and Industrial market trended steadily,y, sales forSmartphone market decreased by approximately 20% compared to 2Q
FY2016. Total sales decreased as well.
• 3Q FY2016 settled on -4.7 % YoY in order level (+2.7% over 2QFY2016), -7.8% YoY in sales level (-4.1% over 2Q FY2016)[1Q - 3Q FY2016 (Apr – Dec)]• 1Q - 3Q (total) FY2016 settled on 874.8 hundred million yen in orderlevel (-5.6% YoY), 855.0 hundred million yen in sales level (-7.0% YoY),
226.2 hundred million yen in recurring profit (Ratio 26.4%, -9.2% YoY).
3

FY2015 1Q – FY2016 3Q Orders and Sales (Consolidated Basis, Index Number)
Total
120103100104102103101
Averagee age oof FY2015＝1000 500100101949292

Order9894From 2Q, sales
decreased butorders increased

S lSales969480
1Q

2Q

3Q
FY 2015

4Q

1Q

2Q

3Q
3Q

FY 2016
4FY2015 1Q – FY2016 3Q Sales by Markets (Consolidated Basis, Index Number)
Smartphone / Mobile
120103
100

10105
99104
Averageg of FY2015＝10086928380
Decrease due to
2Q increase
rebound, etc.

60
1Q

2Q

3Q

4Q

1Q

FY 2015

2Q

3Q
3Q

FY 2016
S ales5

FY2015 1Q – FY2016 3Q Sales by Markets (Consolidated Basis, Index Number)
Automotive
120

101100104102

Average of FY2015＝10094969795Trending steadily with aslightly on upward trend

80
1Q

2Q

3Q

4Q

1Q

FY 2015

2Q

3Q
3Q

FY 2016
S ales6

FY2015 1Q – FY2016 3Q Sales by Markets (Consolidated Basis, Index Number)
Associated Electric Equipment
Equipment,
FA Controlling Device, and Others
120106100102Averageg of FY2015＝10099
97

95

102

96
Trending steadily

80
1Q

2Q

3Q

4Q

1Q

FY 2015

2Q

3Q
3Q

FY 2016
Sales

7

Business Results for 3Q FY2017(unit: hundred millions of Yen)
Major c hanges ov er prior s ame period(A)FY2015(B)FY2016

1Q-3Q1Q-3Q

Sales

919.5

855.0 -64.5(COGS Ratio)（53.8％）（53.2％） （-0.6％）[COGS Ratio] 0.6 point decrease(S GA Rat io)（21.2％）（21.9％） （+0.7％）

Ourchase Cost Ratio 38.0% →38.9%

Ope at g
Operating
Profit(%)

Recurring
Profit(%)

Net Profit
(%)

229.6

212.9 -16.7

25.0%

24.9% （-0.1％）

248.9

226.2 -22.7

27.1%

26.4% （-0.7％）

171.2
18.6%

161.4

-7.0%

-7.2%

[Sales]64.5 decrease

Hirose -34.5

Subsidiaries -30.0

Labor Cost Ratio

5.6% → 5.5%

[SGA Ratio]0.7 point increase-9.8-9.2% [Non-Operating Profit]
Foreign Exchange gain +7.2→ +2.5

-5.7%

18.9% （+0.3％）

Shareholders'Equity Ratio

90.1%

90.5%

Income Per Share481.9Yen

461.9Yen

Exchange Rate:US$

121.70Yen
134.36Yen
10.69Yen

106.63Yen
118.02Yen
9.30YenExchange Rate:100Won(unit: hundred millions of Yen)

Decrease in expensep((-7.6)) but also decrease in sales

3 206 93,206.9

Exchange Rate:€(B)/(A)

Depreciation Ratio 6.5% → 4.8%

3 162 1
3,162.1

Total Assets(B)-(A)

44.8**Impact
p on operatingpg and recurringg pprofit amount due
to depreciation method change (fixed rate→straightline) and partial change in useful life (increase amountin profit/loss)

23.0

1 4%
1.4%
(unit: hundred millions of Yen)

YoY Currency effect am ountSales

- 90.3Operating Profit- 55.2

Recurring Profit- 61.5

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%
19 9%
19.9%
283

276

29.2%
24.1%
295

283

30.0%

20.0%

Recurring
10.0%

200

ProfitRecurring

0.0%
100

Sales

86929082

798982567271

Profit Ratio

83-10.0%

0-20.0%
1Q

2Q

3Q

FY2014

4Q

1Q

2Q

3Q

FY2015

4Q

1Q

2Q

3Q
3Q

FY2016

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

11%down

FY20153%down1Q-3Q

3%downFY2016
1Q-3Q

19%down

0Smartphone
General/Mobile Phone Industrial

Automotive

Tablet/Computer
Notebook
RelatedPC
Equipment*2
Communication*1

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

DigitalConsumer
Electronics

OfficeMachinery※１※２*1 Communication - Smartphone / Mobile Phone notincluded.
*2 Computer Related Equipment – Tablet/Notebook PC
not included.

10

Sales by Application (round number) (Consolidated Basis)(Others 23%)

(Others 22%)

Smartphone/MobilePhoneo e 29%
9%GeneralIndustrial
29%(FA Controlling
Equipment 2%)(Associated Electric
E iEquipmentt 5%)(FA Controlling
Equipment 3%)

FY2015
1Q-3Q
1Q
3Q(Associated Electric
Equipment 4%)(Wireless 3%)

FY2016
1Q-3Q
Q Q*2 (Wireless 3%)

Office Machinery 2%

Computer Related
Equipment 5%

Smartphone/Mobile
Phone 28%※２(Cable 3%) Communication
6%(Cable 3%) Communication 6%

Digital Consumer
Electronics 4%GeneralIndustrial
30%

Office Machinery 2%

Tablet/Notebook
PC 7%

Automotive
18%

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

Computer
RelatedEquipment
3%*1DigitalDi
it lConsumer
Electronics
6%

Automotive
19%

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

11

Overseas Production and Sales Ratio(%)

7072727366

71

6050

Overseas4748454445

S l R
SalesRatio
ti40
Overseas30

Production
Ratio

20100
FY2012FY2013

FY2014FY2015FY2016
1Q-3Q

FY201612

Changes in Consolidated Balance Sheet(hundred millions of Yen)A
AccounttCash andCash in Bank(A) M
Mar 31
31, 2016(B) D
Dec 31
31, 2016

1,647.5 1,793.6

RemarkRk
Increase due to redemption of146.1 government bond, etc.
(B) - (A)

Trade
Receivables

273.4

297.5

24.1 Increase due to sales increase inSecurities

272.1

246.8 -25.3Inventories

81 5
81.5

86 686.6

Dec 2016

5 1
5.1
Increase in machinery,q p, and metal molds,,
57 3 equipment,
57.3
etc.

Noncurrent
AAssets
t

380 4
380.4

437 7
437.7

Investment
Securities

358.7

244.8 -113.9 Transfer to securities (short-Others

152.3

Total Assetsterm) etc
term),
etc.

99.9 -52.4

3,165.9 3,206.9

41.0
13

Changes in Consolidated Balance Sheet(hundred millions of Yen)
AAccountt
Notes Payable
and Ac countyPayable(A) Mar
M 31,31 2016

(B) Dec
D 3131, 2016(B) - (A)R
Remark
k

112.4

111.1

-1.3

38.8

28.1

-10.7 Tax payment

Others

156.4

161.5

5.1

Total Liabilities

307.6

300.7

-6.9

Retained Earnings

3 085 33,085.3

3 162 83,162.8

77 5 Net profit 161
77.5
161.4
4 - Dividend 83
83.9
9

Treasury Stocks-564.5-590.8-26.3 Share Buyback 200,000 shares

Valuation
Variance

73 473.4

74 8
74.8

1 4
1.4

Translation
Adjustment

56 956.9

50 2
50.2

-66.77 Due to strong yen

207.2

209.2

2.0

Total Shareholders'Equity2 858 32,858.3

2 906 22,906.2

47 947.9

Total Liabilities andShareholders' Equity

3,165.9

3,206.9

41.0

Income Taxes
PayableOthers

14Capital Investment and Depreciation Change (Consolidated Basis)(h d d millions(hundredillioff YYen))
140

120

(%)

Previously
140
↓

130

114

110

118

110

118

40.0

111
Previously
81
↓

100

30.0

54

60

9.1

9.4

9.8

11.5

20.0

Depreciation

8.8

8.7

9.2

0

FY2013

FY2014FY20156.7

6.4

FY2016FY2016(Forecast)

FY2016FY2017
1Q-3Q

CapitalInvestment
Ratio

11.4
10.0

20

Investment

7680

4097

CapitalDepreciationRatio0.0(*Excluded: Investment in land, building, software)

15

Business Forecast for the Year Ending March 31, 2017 (Consolidated)
We revised the business forecast announced on Apr 28th 2016
4Q currency rate: 1 US$ = 112. 0 yen (Previous 102.5 yen),１€=120. 0 yen ( Previous 113.5 yen), 100 won=9.50 yen (previous 9.10 yen)note) figures in green italics : previously announced data on Apr 2016

FY2015 (FY ended Mar 3131, 2016)
ActualFirst Half

For the Year(hundred millions of Yen)FY2016 (FY ending Mar 3131, 2017)
Forecast

First HalfFor the YearFirst Half

Forthe Year
通期

Over the Previous Actual AmountOver the Previous Actual AmountAm o u n t
Change%Am o u n t
Change%1,120 01,120.0

Sales(COGS)

Operating
Profit612.3(53.9％)(54.7％)

571.8

1,130.0 -40.5(53.4％)-6.6% -72.8

-6.1%

-9.7

-6.3% -14.9-5.2%

285.0 -23.8-14.2% -20.2-6.6%-13.4%-2.8%(53.4％)

270.0

152.6

287.9

142.9

273.0

24.9%

23.9%

25.0%

24.2%

(%)

Recurring
Profit1,202.8

280.0

167.4

305.2

143.6

27.3%

25.4%

25.1%

(%)

25.2%

195.0

Net Profit

116.9

211.0

101.3

19.1%

17.5%

17.7%(%)
Income Per ShareDividend Per Share
Consolidated Dividend
Payout Ratio-120Yen-596 31Yen
596.31Yen-

240Yen 120Yen
40.2%-

205.0 -15.6

-6.0

18.1%

589 41Yen
589.41Yen

240Yen40.7%[Annual average currency rate]
FY2015 Actual FY2016 Forecast(New)120.14Yen
132.58Yen
100Won 10.42Yen
1US$1€

107.97Yen
118.52Yen
9.35YenOn Oct/16

On Apr/16

103.89Yen 108.00Yen
115.82Yen 120.00Yen
9.16Yen

9.30Yen16