本多通信工業（6826） – [Delayed] Financial Results Presentation for the Fiscal Year Ended March 31, 2022 (April 1, 2021 to March 31, 2022)

Securities Code: 68261Financial Results Presentationfor the Fiscal Year Ended March 31, 2022(April 1, 2021 to March 31, 2022)Business performance rallied amid strong demand.It will grow for FY2022 as well.Medium-term goals set at record high levels in FY2025May 11, 2022Honda Tsushin Kogyo Co., Ltd.Kinji Kashio, President and Representative Director1. Results for fiscal year ended March 31, 2022■ Net sales increased 24% year on year after recovery or growth in all the sectors.■ Operating profit improved significantly following the sales increase and streamlining, overcoming soaring material and distribution costs.■ Ordinary profit and profit achieved greater increases than in the previous fiscal year, due partly to subsidies and the weaker yen.■ Dividends will be 12 yen per share as planned.3Exchange rate (yen/dollar)During the period/Period-endNet salesOperating profitOrdinary profitProfitFY2020106 yen/111 yenFY2021112 yen/122 yenYoYRatio to full-year forecastMillion yen (profit rate) Full-year forecast(Revision announced on Jan. 31)111 yen/110 yen14,85718,451124% 103%18,000-74(-0.5%)147(1.0%)75(0.5%)875(4.7%)1,043(5.7%)693(3.8%)―103%706% 123%914% 107%850(4.7%)850(4.7%)650(3.6%)12 yen24Results for fiscal year ended March 31, 20222. Quarterly performance trendsThe upward trend continued from 1Q of FY2020.4,2804,2044,4624,695(Million yen)5,090358(7.6%)289(5.7%)158(3.7%)87(2.1%)141(3.2%)Net sales3,107Operating profit (margin)-194(-6.2%)3,6073,862-44(-1.2%)5(0.1%)Dividends7 yen12 yen* Values from past financial results were corrected retrospectively due to the application of the Accounting Standard for Revenue Recognition.108 yen106 yen105 yen106 yen109 yen110 yen114 yen116 yen20/1Q20/2Q◆ Exchange rate (yen/dollar)During the period20/3Q20/4Q21/1Q21/2Q21/3Q21/4Q3. Sales by sectorSales grew in all the sectors, particularly in factory automation and in telecommunications.5,090849 Information systemsSales surpassed the previous year’s level after a rise in sales from new customers and projects, while sales from major customers were sluggish.(Million yen)18,4514,2042,9354,462708 4,695676 14,857702 2,9144,9335,58214.50 million unitsQuantity of products for automotive cameras13.50 million units1,7661,4475,2061,577 3.85 million units1,466 3.70 million units431 405 1,310 3.65 million units1,229 3.30 million units478 452 1,139 1,237 1,356 1,474 3,2572,3062,962682 729 766 785 TelecommunicationsFY2020 FY202121/1Q21/2Q21/3Q21/4QAutomobile connectorsDespite the impact of the semiconductor shortage, sales steadily rose after bottoming out in 1Q.Consumer productsSales were buoyant, although they are partly affected by the difficulty customers had in procuring semiconductors.FASales jumped massively amid brisk demand for capital expenditures, although they were impeded by production.Sales from telecom infrastructure operators in Japan and abroad, including FTTH providers and data center operators, increased.574. Analysis of operating profit for FY2021(Compared to FY2020)Although soaring procurement costs and accelerated investments in personnel and other areas had an impact on profit, profitability was secured by increasing sales, streamlining and price revisions.Rise in procurement costs-280Gain from increase in sales+1,300Rise in fixed costs(including personnel expenses)-250Increase in prices of materials -200and components:Soaring logistics expenses:-80Streamlining and price revisions+150Exchange rate+30-74(-0.5%)FY2020◆ Exchange rate (yen/dollar)During the period106 yen949 million yen increase68(Million yen)(Profit rate)875(4.7%)FY2021112 yenForecast for FY20221. Forecast for FY2022■ Net sales are forecast to surge given continuously brisk demand in all sectors and a large order backlog.■ Operating profit will rise at a higher rate of 7.0% as a result of streamlining and price revisions offsetting increased investments in development and human resources, soaring procurement prices and other cost hikes.■ Dividends are forecast at 17 yen per share (with a payout ratio of 39%) in consideration of performance trends and the financial position.Million yen (profit rate)Exchange rate (yen/dollar)During the period/Period-endFY2021112 yen/122 yenFY2022 Full-year plan116 yen/122 yenYoYNet sales18,45120,000108%Operating profitOrdinary profitProfitDividends875(4.7%)1,043(5.7%)693(3.8%)1,400(7.0%)1,400(7.0%)1,000(5.0%)160%134%144%12 yen17 yen+5 yen3. Analysis of operating profit for FY2022(Compared to FY2021)Sales expansion, streamlining and price revisions will offset the increase in costs due to investments in growth and rising procurement prices, enabling profit growth.102. Forecast by sector for FY2022Sales are expected to surge in all sectors due to continuously brisk demand and a large order backlog.Risks have been taken into account to some extent.(Million yen)18,45120,0003,000 Information systemsSales will be buoyant as companies accelerate their DX actions.Efforts will be made to expand new businesses.2,935 5,582 1,766 5,206 6,300 Automobile connectorsThe impact of the shortage of semiconductors and materials will be easing. Sales will rise even in consideration of the negative effect of COVID-19 on production, distribution and other factors.Gain from increase in sales+6001,850 Consumer productsThe impact of difficulty in procuring semiconductors will continue and conditions will vary depending on customers and on products. However, sales will generally be solid.5,700 FACurrently there is no sign of slowdown as demand remains brisk.Sales growth is forecast following the expansion of production.875(4.7%)〇 Investments in personnel:270Mid-career recruitment, investment in education, pay increase〇 Depreciation, testing and research 100expenses and others:Automotive product mixSales price reduction-100Rise in procurement costs-100Streamlining and price revisions+400Exchange rate+100Investments in growth and cost increases-3702,962 3,150 TelecommunicationsSales from telecom infrastructure operators will remain strong.Sales growth is expected after the introduction of automated machinery for increasing production.FY2021FY2022(Forecast)◆ Exchange rate (yen/dollar)During the period112 yenFY2021525 million yen increaseFY2022(Million yen)(Profit rate)1,400(7.0%)116 yen129114. Results and plans for investments, etc.Investments for growth will be continued.(Million yen)1,500Capital InvestmentDepreciationR&D ExpensesFY2021: Actively invested in automationFY2022: Continuously invested in new products and manufacturing1,200Expected to rise in FY2022, following active investments that began in FY2021Personnel and research expenses increased to develop new products and technologies5034735435766356801,000 839 ICT62120150Infrastructure166Products and production facilities251 1494143 730 611 9006003000FY2020FY2021FY2020FY2021FY2020FY2021FY2022(Plan)FY2022(Plan)FY2022(Plan)Management plan1. Management plan2-1. Business connectors■Basic strategiesCreate and launch new products swiftly in “connecting” markets that will expand with Society 5.0.□ Medium-term goals: Record highs in net sales and in operating profit in FY2025□ FY2022:Step up investments for growth to accelerate the creation of new products and businessesRevised25.0(Billion yen)Net salesInformation systemsAutomobile connectorsBusiness connectors (telecommunications, factory automation and consumer products)14.92.94.97.018.42.95.59.920.03.06.3Investmentin growthProduct developmentTechnology development10.7Production systemHuman resources11.6Information Systems businessNew business creation1.0 billion yen4.09.4Connectors businessNew product creation2.5 billion yen50.0100200200FY2020FY2021FY2022(Forecast)・・Medium-term goals中期FY2025・・・FY2032Long-term visionFY2032Operating profit (margin)Profit (margin)ROE-0.7 (-0.5%)8.7 (4.7%)14.0 (7.0%)25.0 (10%) or more55.0 (11%) or more0.7 (0.5%)0.7%6.9 (3.8%)6.1%10.0 (5.0%)8.3%17.5 (7%) or more12% or more40.0 (8%) or more12% or moreLaunch a series of new products to meet expanding and diversifying needs.Market expansion & diversification of needsIncrease investments in manufacturing facilities and in telecom infrastructureIoT for connecting all devicesMarket expansion forecast from 2020 to 2025: 1.8 times in robots, 1.5 times in semiconductor manufacturing systems and 1.4 times in optical communication and network equipmentResults〇 New product development- Connectors for robots- Enhance the lineup of mainstay products (e.g. support for higher electric current and free of screws)- Participate in IOWN GF〇 Digital utilization- Revamp the product websites- Organize online exhibitionsActions〇 Accelerate development of new productsmarkets*- Introduce suited products to priority * Communication infrastructure, robots, industrial machinery and semiconductor manufacturing systems- Enhance optical connection technologiesMedium-term goals〇 Create new products< 1.0 billion yen >〇 Establish new technologiesDevelop optical products and large current products〇 Cultivate new markets and 〇 Step up wide-area sales activities- Cultivate North America and China customers< 1.5 billion yen >markets- Bolster digital marketingImprove profitabilityInvest in automation, improve the production process, revise prices and review distribution and packingLaunch new production basesFY20219.9 billion yenFY202210.7 billion yenFY202511.6 billion yen131514162-2. Automobile connectorsTopics: New products developmentExpand business based on our strong track record in vehicle cameras and high-speed transmission technology.Advance the shift to electronics with an eye towards CASEAutomobile connector marketAutomotive camera marketExpected to grow 1.5 times from 2020 to 2025Expected to grow twice from 2020 to 2025Results〇 For vehicle cameras- Viewing: Deliver for new projects- Sensing: Shift to automated production〇 For connection with automotive equipment- Develop models supporting high-speed Transmission(6 Gbps and 12 Gbps)- Enhance the lineup of mainstay modelsActionsStep up approaches to existing customers and sectors and cultivate new customers and sectors- Cultivate new customers and domains for different car models- Develop next-generation products and Medium-term goalsDepart from dependency on a single business to speed up growthFrom 5.0 billion yen in 2021 to 7.0 billion yen in 2025low-end productsCreate new products <1.5 billion yen>Synergy- Enhance the lineup- Propose applications other than automotive equipmentFrom 0.5 billion yen in 2021 to 2.4 billion yen in 2025Transfer to Vietnam for stable productionIncrease investments in automation and streamlining and reap benefitsLaunch next basesFY20215.5 billion yenFY20226.3 billion yenFY20259.4 billion yenAccelerate development of new products and introduce them to marketsCompact high-speed (6 Gbps and 12 Gbps) transmission LVDS connectorsCompact relay connectors for robots– An industry-leading level of transmission speed among automobile LVDS connectors- Connection with automotive equipment, automotive LAN and others– The industry’s smallest-sized connectors with high wiring workability- Industrial robots, multi-joint robots and others➡ Introduce problem-solving products to growing ➡ Business talks for details startedmarketsEnhance the lineup of compact high-speed transmission automobile connectors0.8mm-pitch I/O connector models with increased current capacity– Supporting transmission of various signals at a maximum of 3 Gbps- Introduced to automotive equipment, supercomputers and others➡ Adding surface mount technology (SMT) models, etc.Offer cutting-edge technologies and broad choices in answer to mounting needs for high speedtransmission from automotive equipment– Current capacity of mainstay products increased- Control devices, small-sized display monitors and other devices requiring power supply and control signals➡ Helping reduce sizes and spaces for devicesOffer problem-solving products in response to growing and diversifying needs2-3. Information systems3. Sustainability initiativesExpand business domains by developing our own DX businesses, utilizing new technologies.Digital implementation in society is speeding up.IoT business marketCloud services marketExpected to grow 1.5 times from 2020 to 2025Expected to grow twice from 2020 to 2025ResultsActionsMedium-term goals〇 Existing businesses- Start transactions with new customers- Increase high value-added projects〇 New businesses- Launch departments for development and sales- Propose new technologies* Attract projects to the Company’s businesses- Advance new technologies- Raise the level of services〇 Bolster existing businesses< 3.0 billion yen >➡ Increase additional value- Expand new businessesDX in manufacturing, automotive technologies, metaverse and others- Expand Apli services〇 Create new businesses< 1.0 billion yen >➡ Expand highly profitable businessesAim to realize a sustainable society and to increase corporate value.Sustainability CommitteeA committee launched under direct control of the President with outside directors serving as advisorsDeveloping policies on sustainability and supervising the status of execution of sameEnvironmentHuman resourcesReduction of greenhouse gas emissionsTargets2030: 38% reduction from the 2013 level2050: carbon neutrality- Introduce and spread energy-saving equipment and activities- Expand adoption of CO2-free electric power- Enhance disclosuresWaste reduction- Increase utilization of recycled materials and review distribution and packingStrengthening the potential of human resources- Hire more mid-career job seekers- Increase investments in training and assistance in personal developmentPromoting health and productivity management- Certified under the 2022 Certified Health & Productivity Management Organizations Recognition Program (March 2022)Creation of comfortable work environments- Improve the human resources system and the workplace environmentGain new technologies (AI, RPA, blockchain and others)Develop human resources (workstyle reforms, recruitment and education)Develop DX products and services(AI-assisted visual inspections, remote scopes, tracing of traffic lines and others)SocietyFY20212.9 billion yenFY20223.0 billion yenFY20254.0 billion yenBuild a sound and firm supply chainMake sustained efforts for appropriate and orderly transactions to build win-win relationships with partners17191820Reference: Consolidated orders in the connector businessFY2021Quarter-to-quarter change1Q+362Q-143Q-44Q+1YoY+140+77+27+141$=109 yen110 yen114 yen116 yen112 yenFY2020Quarter-to-quarter changeYoY-10-18+11+34+13-8+27+50Unit: %Annual+54+12SearchCalculated based on real exchange rates1$=108 yen106 yen105 yen106 yen106 yenInquiries concerning IRHonda Tsushin Kogyo Co., Ltd.Corporate Planning GroupMAIL: ir@htk-jp.comURL: https://www.htk-jp.com/