2019 Q2 IR (E) 20190801 without images · 2018 Q2 2019 Q2 Sales growth in China was largely negative due to a drop in automotive related business. Sales in North America grew, as

SUMIDA CORPORATION

Performance Briefings

<for FY2019 Q2 ending June 30, 2019>

August 1, 2019

Today’s Speakers

2Copyright© 2018 SUMIDA CORPORATION. All rights reserved. 2

Representative Executive Officer & PresidentTomoharu Suseki

Representative Executive Officer & CFOYoshiyuki Honda

Today’s Program

Copyright© 2018 SUMIDA CORPORATION. All rights reserved. 3

1. FY2019 Q2 Performance Results & Management Policies

President Tomoharu Suseki

2. FY2019 Q2 Consolidated Financial Results

ＣＦＯ Yoshiyuki Honda

3. Q&A Session


FY2019 Q2 Performance Results & Management Policies

Tomoharu Suseki

President


Sales by Quarter

USD 107.92 110.74 112.93 110.23 110.45

Euro 130.06 129.18 129.67 125.71 123.74

� Q2 sales continued sluggish following Q1, being lower than last year by 2.8%.

� A year-on-year negative growth in quarterly sales was marked due mainly to market conditions, for the first time since 2016, when yen’s value soared.

238.4 256.8 253.1

232.0 231.7

120

Q2

2018

Q3 Q4 Q1

2019

Q2

（yen）

（100 million yen）（- 2.8%）


Sales by Market

42.75 42.45

2018 Q2 2019 Q2

152.94 141.44

2018 Q2 2019 Q2

Automotive sales which accounts for 61％ of total sales significantly dropped. Accordingly, total sales also dropped.

AutomotiveAutomotive- 7.5%

IndustryIndustry

- 0.7%

42.69 47.84

2018 Q2 2019 2Q

Consumer Electronics

+ 12.1%

（100 million yen）

Steady actuator related sales in the U.S. covered all other minus factors, maintaining total industry sales at almost the same level as last year.Smartphone related sales expanded as mass production of our new products started.

108.1893.89

2018 Q2 2019 Q2


Sales by Region

47.39 51.34

2018 Q2 2019 Q2

� Sales growth in China was largely negative due to a drop in automotive related business.

� Sales in North America grew, as PCI’s sales were added.

� Sales growth in Europe was negative by a large amount on year-on-year basis due to a larger drop in automotive related business.

Asia (excl. China/Taiwan)

+ 8.3% 60.0149.53

2018 Q2 2019 Q2

China/TaiwanChina/Taiwan

- 17.5%

22.80 36.96

2018 Q2 2019 Q2

North America/Others

+ 62.1%

Europe- 13.2%



Operating Income

12.81

5.24

2018 Q2 2019 Q2

� Operating income substantially declined from last year due to a decrease in overall sales.

� In addition, an unfavorable sales mix dragged down operating income. This is because sales of products with high margin dropped while that with low margin increased.

� Smartphone related sales rose as mass production of our new products started, while production costs went up due to low productivity associated with launch of new products.

- 59.1%



Sales in Automotive Market

� As a result of negative sales for three consecutive quarters, Q2 sales dropped by more than 2 billion yen compared to peak sales in recent quarters.

� Since last June, PCI has performed well in its sales and profits.

� Automotive related sales in Japan remained strong.

� Weak sales in Europe and China, brought a big drop in overall sales. Major causes were a drop in car sales in China market due to US-China trade frictions and slowed-down European economy.

� Under these circumstances, EV/HEV related sales were steadily increasing. Our products are being nominated for many new applications.


152.9

163.0

141.4

80

130

180

1Q

2018

2Q

2018

3Q 4Q 1Q

2019

2Q


Sales in Industrial Market

FA RFID 5G / IoT

Market growth was largely negative due to smaller capital investments in China. US market, however, stayed strong.

RFID related business remained strong.

The size of business is small now, but is clearly expanding.

New inquires are increasing significantly.

Medical


Business Development in India

� For Automotive (including motorcycles) market, sales of inductors and keyless entries to new customers are expanding.

� Smartphone related sales mainly to existing customers are also expanding.

Markets in India for usMarkets in India for us

Our operationsOur operations

� Automotive: Promotion of car electrification is led by Indian government.� Consumer Electronics: Markets for smartphone related business and air-

conditioning are expanding.� Industry：Demands for smart meters with promotion of smart city is

increasing. Solar energy generation business is expanding.

Our business strategies for futureOur business strategies for future� Early entry into EV/HEV components market.� Further expansion of businesses with existing customers in Automotive and

Consumer Electronics markets.� Focus on smart meters and IoT areas in Industry market.


Future Outlook

� Deteriorated preconditionsWe had set in the previous IR meetings the following three preconditions to recover our business in Q2 and beyond.

� Improvements on issues related to US-China trade frictions� Recovery of car sales based on economic stimulus measures such

as tax reductions in China� Steady improvement of the economy in other regions

All of the above preconditions have been moving toward opposite direction. As a result, recovery of automotive business is expected to continue for some time longer. On the other hand, the decline of productivity associated with launch of smartphone related new products is expected to be improving from Q3 onwards.

� Under these circumstances, EV/HEV related business has been expanding and will make a bigger contribution to our sales in the coming year and beyond. We will aggressively continue to win new applications in this field.

FY2019 Q2 Consolidated Financial Results

Yoshiyuki HondaCFO


Copyright© 2019 SUMIDA CORPORATION. All rights reserved.

（Million yen）

Consolidated Quarterly Financial Statement

2018 Q2 2019 Q1 2019 Q2 Change % Change %

（A）（B) （C）（C)/(A) （C）/(B)

S a l e s 23,838 23,198 23,172 △2.8％ △0.1％

G r o s s I n c o m e 3,939 3,089 2,838

GI % 16.5％ 13.3％ 12.3%

Operating Income 1,281 600 524 △59.1％ △12.6％

OI % 5.4％ 2.6％ 2.3%

F inanc ia l Income/ E x p e n s e s （ N e t ) △499 △334 △344

Income before Taxes 782 265 179 △77.0％ △32.4％

I n c o m e T a x e s △330 △147 △243

Income Attributableto Owners of Parent 416 114 4 △98.9％ △96.1％

E P S （ y e n ） 15.55 4.22 0.17

14

Operating income declined due to weak capacity utilization and unfavorable sales mix

Operating Income Analysis－ 2018 2Q vs 2019 Q2 －

15

2018 Q2OperatingIncome1,281

（Million yen）

2019 Q2OperatingIncome

524

ForexImpact

+42

Copper pricereduction

+18

China wagesincrease

△163Others△93


Expensereduction

435

Productivitydown△515

Operating income declined due to productivity down and unfavorable sales mix

Sales mix△461

Pontiac+107

R＆DExpensesreduction

△127

Operating Income Analysis－ 2019 Q1 vs. 2019 Q2 －

Capacity utilization

down△199

16


600

Productivity up

+130

（Million yen）


524Copper price

increase△53

Others△4


Foreximpact△13

Wages in Europe

reduction+67

Sales mix△185

Operating income declined due to productivity down and unfavorable sales mix

R＆D ExpIncrease¥

△24

Expensereduction

+248

Chinawages

increase△43


（Million yen）

Consolidated 1st Half Income Statement

2018 1st Half 2019 1st Half Change

（A）（B) （B)/(A)

S a l e s 46,371 △0.4％

G r o s s I n c o m e 6,853 5,928

GI % 14.7％ 12.8％

O p e r a t i n g I n c o m e 1,738 1,124 △35.3％

OI % 3.7％ 2.4％

F i n a n c i a l I n c o m e /E x p e n s e s （ N e t ) △515 △678

In com e b e fo r e Taxes 1,223 445 △63.6％

I n c o m e T a x e s △458 △391

Income Attributable toO w n e r s o f P a r e n t 703 118 △83.1％

E P S （ y e n ） 26.32 4.39

17

Operating income declined due to weak capacity utilization and unfavorable sales mix

FY2019 Full Year Forecast

S a l e s O p e r a t i n gI n c o m e

Income beforeT a x e s

Income Attributableto Owners of Parent

E P S ( y e n ）

PreviousForecast

（Ａ）101,400 6,200 5,070 3,540 130.81

Revised Forecast

（Ｂ）92,000 2,200 900 500 18.43

Change（Ｂ－Ａ） △9,400 △4,000 △4,170 △3,040

Change （％） △9.3％ △64.5％ △82.2％ △85.9％

(reference)FY2018 97,538 5,383 4,061 2,420 90.24

18

（Million yen）


2nd half operating income was estimated at the same level of 1st half

Disclaimer Regarding Forward Looking Statements


Sumida Corporation (referred to as "Sumida") makes this document available for informational

purposes only. This document contains certain “forward-looking statements” which reflect

management’s current views and the assumptions made with respect to specific future events

and financial performance. Such statements are based on currently available information, and

by their nature are subject to various risks and uncertainties that could cause actual results to

differ materially from those projected or implied in “forward-looking statements” and from

historical trends.

These risks include but are not limited to domestic and global economic business conditions,

successful execution of our strategy and our ability to realise the resulting benefits, our ability

to develop and market new products, changes in legislation, legal claims, changes in exchange

and interest rates, changes in tax rates, actuarial assumptions, raw materials and employee

costs, our ability to restructure our operations, the rate of technological changes, political,

economic and other developments in countries where Sumida operates, industry consolidation

and competition. As a result, Sumida’s actual future results may differ materially from the plans,

goals and expectations set forth in such forward-looking statements. Sumida is under no

obligation to, and expressly disclaims any obligations to, update or alter its forward-looking

statements, whether as a result of new information, subsequent or otherwise.

Sumida is under no liability of any person in respect of any loss and damage which may be

suffered or incurred or which may arise directly or indirectly in respect of information contained.

All rights, including, but not limited to the copyright, reserved. No part of this document may be

reproduced in any means without the prior written permission of Sumida.

Documents

2019 Q2 IR (E) 20190801 without images · 2018 Q2 2019 Q2 Sales growth in China was largely negative due to a drop in automotive related business. Sales in North America grew, as