Ushio Inc. · TSE:6925
Ushio — Q3 FY2023 Earnings Presentation
47 slides from Ushio's earnings presentation, Feb 9, 2024
Slide 1: Third Quarter FY2023 Financial Results
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.
Slide 2: Q3 FY2023 Overview
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
Slide 3: Agenda
Agenda 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 3
Slide 4: Summary of Q3 FY2023 Financial Results
Summary of Q3 FY2023 Financial Results YoY Comparison: +4.1 billion yen (+3.2%） Net Sales - Industrial Processes Business: Sales decreased owing to deteriorating 132.5 billion yen conditions in semiconductor and flat panel display markets - Visual Imaging Business: Sales rose on higher digital cinem
Slide 5: FY2023 Q3 Summary of Financial Results
FY2023 Q3 Summary of Financial Results YoY comparison Q3 FY2022 Q3 FY2023 （Billions of yen) Changes ％ Net Sales 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 1
Slide 6: YoY Variation Analysis of EBITDA for Q3 FY2023
YoY Variation Analysis of EBITDA for Q3 FY2023 (billions of yen) 19.2 ＋0.5 -5.5 ＋1.6 ＋0.1 -0.8 -1.9 FOREX ＋2.9 PHS ＋0.2 16.3 (Sales change Strategic LS impacts) Investments (Sales change (R&D) Strategic Others impacts) Investments IP VI (Human capital) (Sales change (Sales change impacts) impacts) Q
Slide 7: Q3 FY2023 Financial Results by Business Segments
Q3 FY2023 Financial Results by Business Segments YoY Comparison Q3 FY2022 Q3 FY2023 (Billions of yen) Changes (%) Net Sales 66.6 60.3 -6.3 (9.5)% Industrial Processes Operating Profit 15.0 8.0 -7.0 (46.6)% (Operating Margin) (22.6%) (13.3%) ((9.3)P) - Net Sales 49.6 59.2 ＋9.6 ＋19.4% Visual Imaging O
Slide 8: Q3 FY2023: Industrial Processes Results
Q3 FY2023: Industrial Processes Results Q3 Q3 YoY Comparison FY2022 FY2023 (Billions of yen) Changes (%) ■Net Sales: Down 6.3 billion yen YoY Net Sales 66.6 60.3 -6.3 (9.5)% – Sales of equipment for LCD panel declined owing to ① decreased demand – Sales of equipment declined owing to curtailed ② cap
Slide 9: Q3 FY2023: Visual Imaging Results
Q3 FY2023: Visual Imaging Results Q3 Q3 YoY Comparison FY2022 FY2023 (Billion of yen) Changes (%) ■Net Sales: Up 9.6 billion yen YoY Net Sales 49.6 59.2 ＋9.6 ＋19.4% – DCP sales benefited from elimination of materials ① shortages and rose on replacement demand – Sales increased on an acceptance inspe
Slide 10: Q3 FY2023: Life Sciences and Photonics Solutions Results
Q3 FY2023: Life Sciences and Photonics Solutions Results Life Sciences Q3 Q3 YoY Comparison ■Net Sales: Down 0.0 billion yen YoY (Billion of yen) FY2022 FY2023 Changes (%) – Sales decreased in light source for environmental Net Sales 4.0 4.0 -0.0 (0.6)% hygiene solutions Operating Profit -3.9 -1.6 ＋
Slide 11: Agenda: Full-Year Forecasts for FY2023
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 11
Slide 12: Summary of FY2023 Full-Year Forecasts
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) - Industrial Processes (¥2.0 billion
Slide 13: FY2023 Full-Year Forecast Revision: Summary
FY2023 Full-Year Forecast Revision: Summary Forecasts FY2022 YoY Comparison Revision on 5/11/2023 Changes (Billions of yen) Results 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 - EBITDA*2 21.0
Slide 14: FY2023 Full-Year Forecast Revision: By Business Segments
FY2023 Full-Year Forecast Revision: By Business Segments FY2022 YoY Comparison Revision*1 Forecasts*1 Changes on 11/6/2023 Results (Billions of yen) （Reference*2） Changes (%) Net Sales 83.0 81.0 +2.0 90.0 -7.0 (7.8)％ Industrial Processes Operating Profit 10.0 9.0 ＋1.0 18.4 -8.4 (45.7)％ (Operating M
Slide 15: FY2023 Full-Year Forecasts: Industrial Processes Business
FY2023 Full-Year Forecasts : Industrial Processes Business YoY Comparison ■Business environment assumptions FY2022 FY2023 Q3 Results Forecasts Progress Business conditions to remain uncertain overall （Reference*） (Revised) Changes (%) rates (Billions of yen) - In semiconductor market, capacity utili
Slide 16: FY2023 Main Products of Industrial Processes Business
FY2023 Main Products of Industrial Processes Business Current 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 substrat
Slide 17: FY2023 Full-Year Forecasts: Visual Imaging Business
FY2023 Full-Year Forecasts : Visual Imaging Business FY2022 FY2023 YoY Comparison Q3 ■Business environment assumptions Results Forecasts Progress While recovering from pandemic and resolving materials shortages, will （Reference*） (Revised) Changes (%) rate remain affected by Hollywood strike and wor
Slide 18: FY2023 Visual Imaging Business Markets
FY2023 Visual Imaging Business Markets Markets Current Status（updated） Projector Sales Transition（updated） • Cinema market operating rates have generally recovered RGB laser Lamp type from COVID-19 pandemic • Resolved previous term’s materials shortages and purchasing Impact of COVID-19 and material
Slide 19: FY2023 Full-Year Forecasts: Life Sciences/Photonics Solutions Business
FY2023 Full-Year Forecasts : Life Sciences/ Photonics Solutions Business Life Sciences Business Comments on Q4 (against Q3 progress rates) FY2022 FY2023 YoY Comparison Q3 - Sales are sluggish. Aims to expand strategic investments as planned. Results Forecasts Progress (Billions of yen) （Reference*）
Slide 20: Shareholder Returns
Shareholder Returns Dividends (yen) 56.3 55.2 【Dividend policy】 Dividends payout ratio 47.2 47.8 Generating stable returns 35.5 43.2 50 yen for FY2023 27.8 30.3 30.2 50 50 50 50 Dividends (continuation from FY2022) 26 26 26 26 26 per Share 24 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 plan 【B
Slide 21: Medium-Term Management Plan
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-
Slide 22: Agenda: Strategic Partnership with Applied Materials
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
Slide 23: Strategic Partnership with Applied Materials: Reason for Business Alliance
Strategic Partnership with Applied Materials ■Reason for Business Alliance Combining Ushio’s more than 20 years of experience developing and manufacturing lithography equipment for packaging applications with Applied Materials’ new Digital Lithography Technology will make it possible to provide solu
Slide 24: Strategic Partnership with Applied Materials: Roles
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 and industry’s broadest portfolio of
Slide 25: Digital Lithography Technology: Maskless Lithography
Strategic Partnership with Applied Materials ■How Digital lithography technology (DLT) works? How DLT technology works (image) Light Source - ”maskless” lithography technology Customer Design File • Enables transfer of a pattern directly onto a Computation substrate without a photomask Infrastructur
Slide 26: Cutting-Edge IC Package Substrates Roadmap
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
Slide 27: Strategic Partnership: Product Portfolio
Strategic Partnership with Applied Materials ■Product Portfolio (image) Advanced Packaging Resolution Panel Wafer End Application DI Stepper DI HPC/ Data ＜１um DI center DI Increasing I/O count （with DLT） （with DLT） Mobility/ PC ５um USHIO DI DI （ADT） IOT/ Edge ＞10um （ADT） Copyright © 2023 Ushio Inc.,
Slide 28: Supplementary Information
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 28
Slide 29: (New) Business Segments and Main Products
(New) Business Segments and Main Products New Business Main Products Product Examples Segment Light Source: UV lamps, OA lamps, Optical equipment lamps, etc. Industrial Equipment: Processes UV Equipment, Curing （提供：TNO） equipment, EUV light source for UV lamps OA lamps Large filed Direct imaging EUV
Slide 30: Reference: Reporting Segment Changes
Reference: Reporting Segment Changes Old Business New Business Segments Segments Industrial Processes Most of Optical Light Source Business Equipment Business is Light Source into Industrial Processes Business is divided into 4 segments Visual Imaging Optical Equipment Most of Imaging Business Equip
Slide 31: Reference: Reporting Segment Changes (including subsegments)
Reference: Reporting Segment Changes (including subsegments) Old business segments New business segments Reporting Subsegments Subsegments Reporting segments Segments ●OA ●UV lamps Halogen lamps ●Illumination Light Source ●OA lamps Business ●Others ●Optical equipment lamps Industrial Processes ●UV l
Slide 32: Reference: Reporting Segment Changes (including subsegments)
Reference: Reporting Segment Changes (including subsegments) Old business segments New business segments Reporting Subsegments Subsegments Reporting segments Segments ●OA ●UV lamps Halogen lamps ●Illumination Light Source ●OA lamps Business ●Others ●Optical equipment lamps Industrial Processes ●UV l
Slide 33: Industrial Processes: Semiconductor process and Ushio's involvement
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) Lithography equipment for cutting- High earnings model driven by edge IC package substrates W
Slide 34: Industrial Processes: EUV Light Source for EUV Mask Inspection
Industrial Processes: EUV Light Source for EUV Mask Inspection Mask Inspection equipment EUV light source for next- Sales of light manufacturer/ Semiconductor device generation semiconductor source Research & development manufacturers mass-production process Maintenance institution Development, Prod
Slide 35: Industrial Processes: UV Equipment for Cutting-edge IC Package Substrates
Industrial Processes: UV Equipment for Cutting-edge IC Package Substrates Advanced & Next generation package demand expansion With IoT evolution, demand increased for servers for data centers processing high capacity and high speed data processing Large Field Stepper（UX-5） Equipment Package substrat
Slide 36: Industrial Processes: Direct Imaging (DI) Lithography Equipment
Industrial Processes: Direct Imaging (DI) Lithography Equipment Print-wired board demand increasing As 5G progressed as application innovation Innovation of each application and demand increasing Data Center Direct Imaging Print-wired board Base Station Lithograph Equipment Sales Equipment Package s
Slide 37: Reference: Summary of Quarterly Financial Results
Reference: Summary of Quarterly Financial Results FY2022 FY2023 YoY Comparison (Billions of yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Changes (%) Net Sales 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% ＋
Slide 38: Reference: Quarterly Financial Results by Business Segments
Reference: Summary of Quarterly Financial Results by Business Segments FY2022 FY2023 YoY Comparison (Billions of yen) Q1 Q2 Q3 Q4* Q1 Q2 Q3 Changes (%) Net Sales 19.8 27.5 19.3 23.3 17.4 20.3 22.5 ＋3.2 ＋17.0% Industrial Operating profit 3.9 6.9 4.1 3.3 2.2 1.7 4.0 -0.0 (1.2)% Processes Operating Mar
Slide 39: Cash Allocation Strategy
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 • Operating cash flow under medium-term management plan: ¥60.0 billion over three
Slide 40: Reference: Sales Ratio by Region
Reference: Sales Ratio by Region Others 0.8% Q3_FY2022 Net Sales Japan North America Asia Europe 128.3 21.1% 25.9% 45.5% 6.7% billion yen Q3_FY2023 Japan North America Asia Europe Net Sales 132.5 21.9% 28.0% 41.1% 8.4% billion yen Others 0.6% Copyright © 2023 Ushio Inc., All Rights Reserved 40
Slide 41: Reference: R&D Expenses/Capital Expenditures and Depreciation
Reference: R&D Expenses/Capital Expenditures and Depreciation R&D Expenses（Billions of yen） Capital Expenditures (Billions of yen) Ratio of R&D Expenses to net sales (%) Depreciation (Billions of yen) 8.5 11.0 7.9 7.1 6.4 6.5 8.9 6.1 14.0 8.2 8.5 7.9 11.4 7.3 7.6 7.1 6.86.9 6.9 Q3 10.1 10.5 Q3 6.7 1
Slide 42: Reference: Balance Sheet
Reference: Balance Sheet Asset Liabilities/Total Net Equity (Billion of yen) Changes (Billion of yen) Changes +18.2 +18.2 323.6 341.8 341.8 -8.2 Cash and Bank Deposits 323.6 -1.8 Notes and AP 56.0 24.3 64.2 26.2 -0.9 Other Current Liabilities -0.4 Marketable Securities 35.2 38.0 36.2 +2.9 Notes and
Slide 43: Reference: Cash Flow
Reference: Cash Flow (Billions of yen) 21.6 15.8 14.5 13.0 16.1 11.5 11.0 8.5 8.8 6.6 5.5 4.3 2.7 -0.3 1.1 0.7 0.8 -1.1 FY2018 FY2019 FY2020 -0.7 FY2021 FY2022 -3.9 -3.4 -5.5 -10.6 -20.3 -26.8 Operating Profit Sales CF Investment CF Finacial CF Free CF Copyright © 2023 Ushio Inc., All Rights Reserve
Slide 44: Glossary
Glossary AI Artificial Intelligence APMI Actinic Patterned Mask Defect Inspection BGA Ball Grid Array CoO 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 IoT Internet of
Slide 45: Renewed IR Website/IR Mail Distribution Feature
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 i
Slide 46: Disclaimer
<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
Slide 47: Contact: Investor Relations Section
Contact: Investor Relations Section Corporate Communication Department Ushio Inc. Email: [email protected] https://www.ushio.co.jp/en/ir/ Copyright © 2023 Ushio Inc., All Rights Reserved 47