Fiscal Year 2018/19 Annual Results

May 24, 2019

Summary of Financial Results for FY2018 Ended March 31, 2019

(April 1, 2018 – March 31, 2019)

1 . Business environment

Japanese economy

Global economy

USA

Europe

China

Steady employment environment

Increases in capital investment and improvements in corporate performance

The economy continued to be on a moderate

recovery track, however, it slowed down

in the second half.

H1: staved off the slowdown in its economic growth and

showed signs of recovery.

H2: decelerated by slowdown of capital investments and

decrease in exports due to US-China trade friction.

continued solid economic growth due to improvement of employment environment and steady growth of consumer spending

recovered moderately despite the uncertainty due to Brexit.

2. FY2018 sales and profit factors

Net sales 27,121 mil. yen +7.2 % (year-to-year)

Operating income 2,787 mil. yen - 8.5 % (year-to-year)

Operating income margin 10.3 % 12.0 % (pervious period)

ROE 9.3 % 11.2 % (pervious period)

Dividend 75 yen (outlook） 75 yen (pervious period)

• Thermistor sensors for air conditioners and automobiles were strong.

• Costs increased to meet surging demand for thermistor sensors for air conditioners.

• Large capital investment was made to meet expanding demand for thermistor elements and thermistor sensors, resulting in an increase in expenses such as depreciation.

• Sales were sluggish in the second half due to China’s economic slowdown.

3. Statement of income (Summary)

FY2017 (ended March 31, 2018) FY2018 (ended March 31, 2019)

Amount Composition

ratioAmount

Composition

ratio

Comparison

with last year

Net sales 25,289 100.0 27,121 100.0 1,832

Cost of sales 19,102 75.5 20,897 77.0 1,794

Gross profit 6,186 24.5 6,224 23.0 38

Selling, general and

administrative expenses3,141 12.4 3,437 12.7 296

Operating income 3,045 12.0 2,787 10.3 -258

Non-operating income 88 0.3 114 0.4 26

Non-operating expenses 62 0.2 38 0.1 -23

Ordinary income 3,071 12.1 2,863 10.6 -208

Extraordinary income 0 0.0 0 0.0 0

Extraordinary loss 36 0.1 56 0.2 20

Income taxes and others 744 2.9 746 2.8 2

Net income attributable to

owners of the parent2,280 9.0 2,055 7.6 -225

ROE（%） 11.2 ― 9.3 ― ―

(Amount: mil. yen, comparison: ％)

4. Net sales and operating income

14,546

13,099

16,548 17,086 16,143

18,757

20,113

21,261

22,071

25,289 27,121

27,500

1,214

869

2,055 1,778

849

1,366

1,889

1,663

2,394

3,045

2,787

2,500

0

2,500

5,000

0

15,000

30,000

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019

Outlook

Net sales Operating income

(Mil. yen) (Mil. yen)

5. Balance sheet (Summary)

Mar. 31,

2018

Mar. 31,

2019Change

Current liabilities 7,760 9,024 1,263

Account payable 3,749 4,276 527

Short-term loan

payable831 1,124 293

Others 3,180 3,623 443

Noncurrent liabilities 1,503 2,973 1,470

Long-term loan

payable1,167 2,596 1,428

Others 335 377 41

Total liabilities 9,263 11,997 2,733

Net assets 21,468 22,678 1,210

Total liabilities and

net assets30,732 34,676 3,943

Mar. 31,

2018

Mar. 31,

2019Change

Current assets 21,047 22,512 1,465

Cash and

deposits 7,130 7,480 349

Account

receivable7,373 7,377 4

Inventory assets 5,699 6,614 915

Others 844 1,040 196

Noncurrent assets 9,684 12,163 2,478

Property, plant

and equipment8,477 10,895 2,418

Intangible assets 132 125 -7

Investments and

other assets1,074 1,142 67

Total assets 30,732 34,676 3,943

(Mil. yen)

Assets Liabilities and shareholders’ equity

(Mil. yen)

18,126 18,441

19,343

21,468

22,678

68.170.6 70.9 69.7

65.3

-10

0

10

20

30

40

50

60

70

80

5,000

15,000

25,000

Mar. 31,

2015

Mar. 31,

2016

Mar. 31,

2017

Mar. 31

2018

Mar. 31,

2019

6. Balance sheet items

(Mil. yen)

26,462 25,987 27,113

30,732

34,676

Mar. 31,

2015

Mar. 31,

2016

Mar. 31,

2017

Mar. 31,

2018

Mar. 31,

2019

4,340

4,799

5,091

5,699

6,614

Mar. 31,

2015

Mar. 31,

2016

Mar. 31,

2017

Mar. 31,

2018

Mar. 31,

2019

(Mil. yen) (Mil. yen)

Shareholders’ equity and equity ratioInventory assetsTotal assets

7. Cash flows

308

-1,068 -1,235

-4

1,144

FY2014 FY2015 FY2016 FY2017 FY2018

（Mil. yen)

Cash flow used in financing activities

-1,169 -1,544

-1,224

-1,931

-4,241

2,042 2,108 2,514

2,701

3,521

879 564

1,290 770

-720

-4,500

-3,500

-2,500

-1,500

-500

500

1,500

2,500

3,500

4,500

FY2014 FY2015 FY2016 FY2017 FY2018

（Mil. yen）

Free cash flow

(Mil. yen)(Mil. yen)

1,392

1,282

1,369

1,685

2,040

1,562

1,214

1,941

4,198

2,000

8. Capital expenditure, depreciation, R&D expenditure

(Mil. yen)

Capital expenditure DepreciationResearch and development

expenditures

435 438

724

386

500

6,167

7,099

7,356

4,363

5,053

6,024

3,316

3,771

3,951

2,283 2,612

3,075

2,036 2,355

2,329

1,971 2,061

2,070

1,361 1,525

1,682

575

812 634

FY2016

FY2017

FY2018

FY2016

FY2017

FY2018

FY2016

FY2017

FY2018

FY2016

FY2017

FY2018

FY2016

FY2017

FY2018

FY2016

FY2017

FY2018

FY2016

FY2017

FY2018

FY2016

FY2017

FY2018

素子 空調機器 家電 自動車 住設機器 ＯA Industrial

equipment

Measuring

equipment

9. Sales amount by application

(Mil. yen)

Thermistor

elements

Air

conditioners

Home

appliancesAutomotive

Household

equipment

Industrial

equipmentOA

Measuring

instruments,

and others

10. Sales by application

Automotive

Air conditioners

Homeappliances

Household

equipment

OA

Industrial equipment

Others

FY 2017Ended Mar. 31, 2018

29.6%

20.7%17.1%

10.8%

8.4%

6.9%

Automotive

Air conditioners

Home appliances

10.3%

7.8%

7.0% 29.6%

22.8%16.9%

FY 2018Ended Mar. 31, 2019Household

equipment

OA

Industrial equipment

Others

11. FY2019 (ending March 31, 2020) business outlook

Net sales 27,500 mil. yen +1.4% (year-to-year)

Operating income 2,500 mil. yen -10.3% (year-to-year)

・Global economy has many uncertain factors.

- US-China trade friction, Brexit, protectionism, etc.

・Japanese economy is slowing and its future outlook is unclear.

・Demand for temperature sensors is expected to remain strong.

・Depreciation is to increase due to aggressive capital investment.

- Production capacity expansion and production efficiency

enhancement enable us to meet growing demand in a timely

manner.

12. FY2019 (ending March 31, 2020) business outlook

FY2018

actual

H1 FY2019

outlook

H2 FY2019

outlook

FY2019

full year

outlook

Net sales27,121 13,500 14,000 27,500

（7.2） （-0.9） （3.7） （1.4）

Operating income2,787 1,100 1,400 2,500

（-8.5） （-29.3） （13.6） （-10.3）

Ordinary income2,863 1,110 1,390 2,500

（-6.8） （-28.9） （6.8） （-12.7）

Net income

attributable to

owners of the parent

2,055 810 1,010 1,820

（-9.9） （-26.3） （5.6） （-11.4）

(Amount: mil. yen, comparison: ％)

( ): Year-to-year comparison

Business Deployment

13. Growth strategy

Further enhancement of

research & development system

Focus on “green-oriented”, “energy-saving”

and “safety-related” fields

Aggressive expansion into overseas markets

Enhancement of production system

Aggressive investment toward market share expansion

14. Enhancement of production system

Aomori constructed its 3rd building.

Shanghai moved to expand floor space.

Thai constructed its 5th building.

Fukushima constructed its 2nd factory (Matsukawa).

Fukushima renovated the acquired adjacent factory.

Kakunodate constructed its 3rd building.

Tohoku constructed its 3rd building.

Fukushima completed the construction of its 10th building.

Sep. 2012

Dec. 2013

Apr. 2015

Jul. 2017

Sep. 2017

Dec. 2017

May 2019

Thai constructed its 6th building.Jun. 2018

15. Aggressive expansion into overseas markets

Sales Division

Overseas Sales Department

Japan

China

Shanghai Shibaura

Electronics Co., Ltd.*

Dongguan Shibaura

Electronics Co., Ltd.*

Shibaura Electronics

Hong Kong Co., Ltd.

*Sales divisions of the manufacturing sites

Shibaura Electronics USA

America

Sales network in Europe, America, and China

Shibaura Electronics

Europe GmbH (Germany)

Europe

Collaborate with a distributor Collaborate with

a sales representativeCollaborate with a distributor

16. Focus on “green-oriented”, “energy-saving” and “safety-related” fields

Responding to the environmental needs which continue to increase globally

Larger share in growing fieldsExpanding

applications

<<World trends>>

Green-oriented

Energy-saving

Highly-functional

Safety-related

Thermistor elements

Household equipment

Air conditioners

Home appliances

OA

Industrial equipment

Automotive

-Colorization -Highly-functional (Non-contact)

-Green-oriented -Energy-saving -Safety-related

-Green-oriented -Energy-saving -Europe & Emerging Countries -Safety-related

-Green-oriented -Energy-saving -All electrification -Highly-functional -Emerging countries

-High quality -Wide temperature range -Large supply

-Green-oriented -Energy-saving -Production automatization -Robot

-Green-oriented -Energy-saving -Hybrid -EV

17. Further enhancement of R&D system

Enhancing research & development system further

Development of new & improved products

Improvement of existing products

Improvement of production efficiency – automatization

Collaborative research with academia

18. Long-term outlook for automotive powertrain

0

2

4

6

8

10

12

14

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Pass

enger

car

sale

s (

10 m

illion u

nits

/ year)

G D CNG HV PHV EV FCV

2020

FCV：0％EV：5％PHV：4%

HV：6％CNG：3％D：18％G：64％

2030

FCV：1％EV：8％PHV：11%

HV：12％CNG：3％D：14％G：51％

2040

FCV：1％EV：15％PHV：20%

HV：15％CNG：3％D：11％G：35％

G: Gasoline Vehicle D: Diesel Vehicle CNG: Compressed Natural Gas Vehicle HV: Hybrid Vehicle

PHV: Plug-in Hybrid Vehicle EV: Electric Vehicle FCV: Fuel Cell Vehicle

Source: “Materials for the Strategic Commission for the New Era of Automobiles (the 1st meeting) “ by the Ministry of Economy, Trade and Industry

Electric-powered vehicles:15％

Engine vehicles:

95%

Engine vehicles:

91%Engine vehicles:

84%

Electric-powered vehicles:32％

Electric-powered

vehicles:51%

19. Shareholder return

25 30

35 40 40

50 55

60

75 75 75

23.417.3 20.7

61.4

26.5 23.6

35.2 25.5 25.3 28.1

31.8

-100

-80

-60

-40

-20

0

20

40

60

0

10

20

30

40

50

60

70

80

90

100

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

(Outlook)

Stable dividend

Dividend (yen)

Dividend payout ratio (%)

Disclaimer regarding forward-looking statements

The foregoing statements regarding future results reflect the Company‘s expectations based on information available at the time of announcement. The information contains certain forward-looking statements that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

Thank you very much.

References

Corporate name SHIBAURA ELECTRONICS CO., LTD.

Start of operation March 3, 1953

Head office Kamiochiai, Chuo-ku, Saitama City, Saitama, Japan

Representative Hiroyuki Hashikura, President

Business

Manufacturing and sales of thermistor elements and applied products

using them (temperature sensors, humidity sensors, hygrometers,

temperature controllers, anemometers, etc.)

Capital 2,144 million yen (as of March 31, 2019)

Net sales 27.1 billion yen (FY2018 / Consolidated)

Ordinary income 2.8 billion yen (FY2018 / Consolidated)

Manufacturing

sites6 sites in Japan, 3 overseas sites in Thailand and China

Number of

employeesApprox. 4,700 (as of March 31, 2019 / Consolidate)

Stock exchange

listingJASDAQ Standard, Tokyo Stock Exchange (Code number : 6957)

Share unit 100 shares

［Reference］Corporate Info

Head office of

Shibaura Electronics Co., Ltd.

Th

erm

isto

r e

lem

en

t p

rod

uctio

n

• Fukushima

Mo

the

r fa

cto

rie

s

• Tohoku

• Iwate

• Kakunodate

• Aomori

• Miharu

Ove

rsea

s m

an

ufa

ctu

rin

g s

ite

s

• Thai

• Shanghai

• Dongguan

Te

st ce

nte

rs

• Tohoku

• Fukushima

• Iwate

Research on thermistor elements

Basic research

Technologies development

New & value-added products

Guidance for overseas factories

Mass production

Quality assurance

Design verification

［Reference］Production system

Shibaura ElectronicsShibaura Electronics Research, development and designing・

A thermistor is a thermally sensitive resistor generally composed of semiconductor materials, and its

resistance varies significantly with temperature.

Thermistors are economical and stable, and operate in the temperature range that covers the whole

range necessary for ordinary temperature control. They therefore are used in a wide range of

applications.

Shibaura produces NTC (negative temperature coefficient) thermistors only.

They exhibit decreasing resistance with increasing temperature, and are used in temperature detection

sensors. There are also PTC (positive temperature coefficient) and CTR (critical temperature resistor)

thermistors.

［Reference］Definition of terms

Thermistor

PSB thermistor element

Shibaura independently developed glass-encapsulated thermistors.

With excellent heat-resisting property, mechanical strength and stability, they are now Shibaura’s main

products.

PSB thermistors were patented in major countries (Japan, the U.S., the U.K., Germany, France,

Canada, Italy and Switzerland).

［Reference］Number of thermistors installed in a product

Household

equipment

Solar system Shower toilet Water heaterHighly efficient hot

water supply system

［ 1 to 3 ］ ［ 2 to 3 ］ ［ 2 to 5 ］ ［ 10 to 20 ］

A/C

Fan heater Room A/C Industrial A/C

[ 2 to 3 ］ ［ 2 to 5 ］ ［ 5 to 15 ］

Home

appliances

Microwave oven Rice cooker Refrigerator IH cooker

［ 2 to 3 ］ ［ 2 to 3 ］ ［ 2 to 8 ］ ［ 5 to 15 ］

OA

Printer Copy machineMulti-functional

copier

［ 2 ］ ［ 2 to 3 ］ ［ 3 to 5 ］

Industrial

equipment

Fire alarm Machine, robot Freezing showcase Freezing container

［ 2 ］ ［ 1 to 2 ］ ［ 2 to 5 ］ ［ 5 to 10 ］

Automotive

Car A/C Intake air, exhaust gas, water, fuel, oil Hybrid system

［ 4 to 5 ］ ［ 8 to 10 ］ ［ 8 to 10 ］

［ ］: Number of thermistors in a product

［Reference］Applications for various temperature ranges

From -50℃ to 1,000℃. Thermistor technology produces high added value.

Existing products(Glass coated thermistors)

High-value-added products（Glass coated thermistors for high temperature）

-50℃ 0℃ 50℃ 100℃ 300℃ 500℃ 1,000℃

Shibaura’s original technology

Applications

●(Tuna) stock freezer

●Refrigerator

●Air conditioner

●EcoCute(CO2 heat pomp)

●Hot-water supply

●Automotive (Water)

●Dishwasher (Drying)

●Rice cooker

●Microwave oven

●Automotive(HV & EV motors)

●Copy machine

●IH cooker

●Fan heater

●Automotive (EGR)

●Oven●Household equipment

(Gas flame)

●Automotive(DPF)