Financial Results for the Fiscal Year ended March 31, 2016 May 10, 2016 Oki Electric Industry Co., Ltd. © Copyright 2016 Oki Electric Industry Co., Ltd. 1 Table of Contents I. Financial results for the FY ended March 2016 1. 2. 3. 4. 5. 6. Summary of Financial Results Segment Information (Net sales) Segment Information (Operating income) Changing Factors of Operating Income Balance Sheets Cash Flows II. Projections for the FY ending March 2017 1. 2. 3. 4. 5. 6. © Copyright 2016 Oki Electric Industry Co., Ltd. Policies for FY ending March 2017 Profit and Loss Projections Segment Information Changing Factors of Operating Income Free Cash Flows Projections Capital Expenditure and R&D Expenses Projections 2 Summary of Financial Results Operating income secured results exceeding previous projections, though net sales and operating income decreased year on year. Profit attributable to owners of parent was 6.6 B yen due to the impact of foreign exchange losses in non-operating expenses. Proposed year-end dividend : 3 yen per share (as planned) (Billion yen) Net sales FY end Mar. 2016 Previous projections (Nov. 5) Variance FY end Mar. Variance 2015 490.3 515.0 (24.7) 540.2 (49.9) Operating income 18.6 17.0 +1.6 32.4 (13.8) Ordinary income 11.4 14.5 (3.1) 37.9 (26.5) 6.6 10.0 (3.4) 33.1 (26.5) 120.2 125 109.9 132.6 135 138.8 Profit attributable to owners of parent USD average exchange rate (Yen) EUR average exchange rate (Yen) © Copyright 2016 Oki Electric Industry Co., Ltd. 3 Segment Information (Net sales) ATMs for China and existing networks for telecom carriers decreased year on year. Sales of fire-fighting digital wireless systems passed a peak. Sales of cash-handling equipment and systems for financial institutions in Japanese market were favorable. FY end Mar. (Billion yen) 2016 Previous projections (Nov. 5) FY end Mar. 2015 Variance Variance Info-telecom 304.8 320.0 (15.2) 352.5 (47.7) Printers 124.6 130.0 (5.4) 129.3 (4.7) EMS 42.4 46.0 (3.6) 40.3 +2.1 Others 18.5 19.0 (0.5) 18.1 +0.4 490.3 515.0 (24.7) 540.2 (49.9) Total *Breakdown of results and variance in Info-telecom (Billion yen) Solution & Services Telecom systems Social infrastructure systems Mechatronics systems Total © Copyright 2016 Oki Electric Industry Co., Ltd. FY end Mar. 2016 84.6 68.5 46.1 105.7 304.8 Variance from Previous projections +2.1 (7.0) (1.9) (8.3) (15.2) Y on Y +0.7 (20.4) (12.8) (15.0) (47.7) 4 Segment Information (Operating income) Operating income decreased due to sales decline in Info-telecom business and the impact of currency exchange in Printers business year on year. Structural reform led to lucrative improvement in domestic business. FY end Mar. 2016 (Billion yen) Previous projections (Nov. 5) Variance FY end Mar. 2015 Variance 16.5 15.5 ＋1.0 25.9 (9.4) Printers 1.4 2.0 (0.6) 6.7 (5.3) EMS 2.3 2.5 (0.2) 2.0 ＋0.3 Others 4.2 4.0 ＋0.2 3.5 ＋0.7 Eliminates & Corp. (5.8) (7.0) ＋1.2 (5.7) (0.1) Total 18.6 17.0 ＋1.6 32.4 (13.8) Info-telecom © Copyright 2016 Oki Electric Industry Co., Ltd. 5 Changing Factors of Operating Income Operating income decreased due to decline in sales volume and the impact of currency exchange. (Billion yen) (12.5) Impact of currency exchange Changes in price 32.4 Changes in volume and product mix FY14 Results © Copyright 2016 Oki Electric Industry Co., Ltd. (3.0) +2.5 Reduction in production and procurement costs (4.0) + 3.0 Changes in fixed costs, etc. 18.6 FY15 Results 6 Balance Sheets In shareholders' equity, accumulated other comprehensive income decreased due to external environment, though earnings were accumulated. Total assets reduced. (Billion yen) Mar. 2016 Mar. 2015 Variance Current assets 277.6 293.6 (16.0) Fixed assets 134.1 145.7 (11.6) 411.8 439.4 (27.6) Current liabilities 199.2 211.6 (12.4) Fixed liabilities 105.2 106.4 (1.2) 304.4 318.0 (13.6) 106.7 119.6 (12.9) 0.7 1.8 (1.1) Net assets 107.4 121.4 (14.0) Total liabilities and net assets 411.8 439.4 (27.6) Shareholders’ equity ratio (%) D/E ratio (times) 25.9 1.1 27.2 0.9 (1.3%) +0.2pt Assets Liabilities Shareholders’ equity Others © Copyright 2016 Oki Electric Industry Co., Ltd. 7 Cash Flows Free Cash flows saw a net outflow of 17.4 B yen due to transient factors such as uncollected trade receivables. (Billion yen) FY end. March 2016 FY end. March 2015 Variance Ⅰ Cash flows from operating activities (3.6) 41.0 (44.6) Ⅱ Cash flows from investing activities (13.8) (18.6) ＋4.8 Free cash flows (Ⅰ＋Ⅱ) (17.4) 22.4 (39.8) Ⅲ Cash flows from financing activities 11.1 (20.7) ＋31.8 Cash and cash equivalents 46.3 53.6 (7.3) Purchases of equipment 11.6 10.6 ＋1.0 Depreciation 14.4 14.5 (0.1) © Copyright 2016 Oki Electric Industry Co., Ltd. 8 I. Financial results for the FY ended March 2016 1. 2. 3. 4. 5. 6. Summary of Financial Results Segment Information (Net sales) Segment Information (Operating income) Changing Factors of Operating Income Balance Sheets Cash Flows II. Projections for the FY ending March 2017 1. 2. 3. 4. 5. 6. © Copyright 2016 Oki Electric Industry Co., Ltd. Policies for FY ending March 2017 Profit and Loss Projections Segment Information Changing Factors of Operating Income Free Cash Flows Projections Capital Expenditure and R&D Expenses Projections 9 Policies for FY ending March 2017 < Changes of business environment > Overseas：Economic sluggish in emerging countries Rise of home-grown venders in China ATM market Shrink of office printer market and intensified competition Japan：Expanding sophisticated demands for social infrastructures capitalizing on ICT The policies for the last year of Mid-term Business Plan 2016 - Securing stable profit - Generating growth business - Consolidating a financial foothold © Copyright 2016 Oki Electric Industry Co., Ltd. 10 Profit and Loss Projections Aim to achieve a year-on-year net sales and operating income increase Annual dividend plan: 5 yen per share Currency exchange rate assumption : ¥110/USD, ¥125/EUR FY end. Mar. 2017 (Plan) (Billion yen) Full year 1st half FY end. Mar. 2016 (Results) Full year 1st half 500.0 210.0 490.3 223.0 Operating income 20.0 0.0 18.6 3.6 Ordinary income 18.0 (0.5) 11.4 2.7 Profit attributable to owners of parent 12.0 0.0 6.6 0.9 Net sales © Copyright 2016 Oki Electric Industry Co., Ltd. 11 Segment Information Info-telecom: Expand profitability due to promotion of business structure reforms in a stable profitable business Mechatronics systems: Rebuild Chinese business and enhance global deployment Printers: Expand sales of strategic products and have a fully M&A impact (Billion yen) Info-telecom Mechatronics systems Printers EMS Others Corporate & Eliminations Total © Copyright 2016 Oki Electric Industry Co., Ltd. FY end. Mar.2017 (Plan) Full year 1st half FY end. Mar.2016 (after restatement) Full year 1st half Operating income 188.0 13.5 112.0 5.5 133.0 2.5 48.0 2.5 19.0 3.5 66.0 (1.2) 51.0 2.3 64.0 0.0 21.0 0.8 8.0 1.6 191.2 11.6 113.7 6.0 124.6 1.4 42.4 2.3 18.5 4.2 78.9 0.9 55.0 3.5 59.1 (0.5) 20.6 0.8 9.5 2.2 Operating income (7.5) (3.5) (6.9) (3.3) Net sales 500.0 20.0 210.0 0.0 490.3 18.6 223.0 3.6 Net sales Operating income Net sales Operating income Net sales Operating income Net sales Operating income Net sales Operating income 12 Changing Factors of Operating Income Operating income is expected to increase due to rise in sales volume and decrease in production and procurement costs. (Billion yen) Impact of currency Changes in exchange fixed costs, etc. Changes in price +3.0 Changes in volume and product mix 18.6 FY15 Results © Copyright 2016 Oki Electric Industry Co., Ltd. (4.0) +4.5 ±0.0 Reduction in production and procurement costs (2.0) 20.0 FY16 Plan 13 Free Cash Flows Projections Further enhance financial foothold by securing stable cash flows (Billion yen) FY end Mar. 2017 (Plan) FY end Mar. 2017 Variance Ⅰ Cash flows from operating activities 25.0 (3.6) +28.6 Ⅱ Cash flows from investing activities (15.0) (13.8) (1.2) 10.0 (17.4) +27.4 Free cash flows (Ⅰ+Ⅱ) © Copyright 2016 Oki Electric Industry Co., Ltd. 14 Capital Expenditure and R&D Expenses Projections Property, Plant & Eqip. R&D Expenses (Billion yen) [Capital Expenditure] 11.7 11.5 1.8 0.9 2.7 2.0 1.0 3.0 2.0 4.1 3.5 2.2 Others EMS 13.3 13.0 2.0 2.0 2.4 2.0 5.0 4.0 Printers Printers Mechatronics systems Info-telecom Others 3.9 5.0 Mechatronics systems Info-telecom FY end. Mar.2016 FY end. Mar.2017 (Plan) FY end. Mar.2016 FY end. Mar.2017 (Plan) [Depreciation] 11.2 12.0 © Copyright 2016 Oki Electric Industry Co., Ltd. 15 Notice • Indication method of amounts in hundred millions (yen) are as follow: Amounts in each item are rounded to the nearest hundred million yen. Variances are calculated in the hundred millions. • The projections and plans in this material are subject to change depending upon the changes of business environments and other conditions. © Copyright 2016 Oki Electric Industry Co., Ltd. 16