Advantest : FY2018 Consolidated Financial Results

Advantest Corporation (FY2018)

FY2018 Consolidated Financial Results

(Advantest's consolidated financial statements are prepared in accordance with IFRS)

(Period ended March 31, 2019)

	April 25, 2019
Company Name	: Advantest Corporation
	(URL https://www.advantest.com/investors)
Stock Exchange on which shares are listed	: First section of the Tokyo Stock Exchange
Stock Code Number	: 6857
Company Representative	: Yoshiaki Yoshida, Representative Director, President and
	CEO
Contact Person	: Atsushi Fujita, Managing Executive Officer and Executive
	Vice President, Corporate Administration Group

[phone]

Date of General Shareholders' Meeting (as planned) : June 26, 2019

Dividend Payable Date (as planned)	:	June 4, 2019
Annual Report Filing Date (as planned)	:	June 27, 2019
Financial Results Supplemental Materials	:	Yes
Financial Results Presentation Meeting	:	Yes

(Rounded to the nearest million yen)

1.Consolidated Results of FY2018 (April 1, 2018 through March 31, 2019)

(1) Consolidated Financial Results

(% changes as compared to the previous fiscal year)

	Net sales				Operating				Income before						Net income					Net income					Total comprehensive
																			attributable to owners
					income					income taxes										of the parent					income for the year
	Million % increase				Million		% increase			Million		% increase			Million		% increase			Million		% increase			Million	% increase
	yen	(decrease)			yen		(decrease)			yen		(decrease)			yen		(decrease)			yen		(decrease)			yen	(decrease)
FY2018	282,456	36.3			64,662		164.1		66,211			172.7			56,993			214.8		56,993			214.8		56,645	271.9
FY2017	207,223	32.9			24,487		76.1		24,282			61.6			18,103			27.5		18,103			27.5		15,230	(5.7)
	Basic earnings per				Diluted earnings					Return on equity						Ratio of income before								Ratio of operating
										attributable to owners of
	share				per share							the parent					taxes to total assets							income to net sales
		Yen					Yen								%								%			%
FY2018	302.35				287.37							35.3						23.7							22.9
FY2017	101.94				92.69							15.5						10.0							11.8
(2) Consolidated Financial Position
											Equity attributable to							Ratio of equity						Equity attributable
	Total assets					Total equity												attributable to						to owners of the
											owners of the parent
																		owners of the parent						parent per share
	Million yen						Million yen						Million yen										%			Yen
FY2018	304,580				198,731							198,731							65.2						1,004.53
FY2017	254,559				124,610							124,610							49.0						696.04
(3) Consolidated Cash Flows
	Cash flows from						Cash flows from								Cash flows from						Cash and cash equivalents
	operating activities						investing activities								financing activities									at end of year
		Million yen								Million yen								Million yen							Million yen
FY2018	44,792						(15,915)								(13,724)									119,943
FY2017	28,254						(2,329)								(15,237)									103,973

Advantest Corporation (FY2018)

2. Dividends

		Dividend per share						Cash dividend
						Total	Payout ratio	rate for equity
								attributable to
	First	Second	Third	Year end	Annual total	dividend paid
	quarter end	quarter end	quarter end			(annual)	(consolidated)	owners of the
								parent
								(consolidated)
	Yen	Yen	Yen	Yen	Yen	Million yen	%	%
FY2017	－	9.00	－	23.00	32.00	5,715	31.4	4.9
FY2018	－	50.00	－	42.00	92.00	18,022	30.4	10.8
FY2019	－	－	－	－	－	N/A	－	N/A
(forecast)

(Note) The dividend forecast for FY2019 hasn't been decided.

3. Projected Results for FY2019 (April 1, 2019 through March 31, 2020)

(% changes as compared to the previous fiscal year)

	Net sales			Operating income		Income before		Net income		Net income attributable
						income taxes				to owners of the parent
	Million		%	Million	%	Million	%	Million	%	Million	%
	yen			yen		yen		yen		yen
FY2019	230,000		(18.6)	30,000	(53.6)	31,000	(53.2)	26,000	(54.4)	26,000	(54.4)

4. Others

(1)Material changes in subsidiaries during this period (changes in scope of consolidation resulting from changes in subsidiaries): None

(2)Changes in accounting policies and accounting estimates

1)Changes in accounting policies required by IFRS: Yes

2)Changes arising from factors other than 1: None

3)Changes in accounting estimates: None

For details, please refer to the (5) Notes to the Consolidated Financial Statements (Changes in Accounting Policies), page 12.

(3)Number of issued and outstanding share (ordinary share):

1)Number of issued and outstanding share at the end of each fiscal period (including treasury share): FY2018 199,566,770 shares; FY2017 199,566,770 shares.

2)Number of treasury share at the end of each fiscal period: FY2018 1,732,515 shares; FY2017 20,539,246 shares.

3)Average number of outstanding share for each period:

FY2018 188,501,951 shares; FY2017 177,580,557 shares.

(Note) Advantest's share (FY2018 272,446 shares, FY2017 －shares), which is being kept as performance share option compensation in trust account, is included in the number of treasury share at the end of each fiscal period. Moreover, the Advantest's share that mentioned above is also included in the treasury share which is deducted during the calculation of average number of outstanding share for each period.

(Reference) Non-Consolidated Results of FY2018 (April 1, 2018 through March 31, 2019)

(1) Non-Consolidated Financial Results

(% changes as compared to the previous fiscal year)

	Net sales		Operating income			Ordinary income		Net income
	Million yen	% increase	Million yen	% increase		Million yen	% increase	Million yen	% increase
		(decrease)		(decrease)			(decrease)		(decrease)
FY2018	261,120	43.6	47,500	372.3		53,164	99.1	48,310	83.7
FY2017	181,830	26.7	10,058	118.3		26,709	171.1	26,302	72.6
	Net income per share -		Net income per share -
	basic		diluted
		Yen		Yen
FY2018	256.28		243.13
FY2017	148.11		133.57

Advantest Corporation (FY2018)

(2) Non-Consolidated Financial Position

	Total assets	Net assets	Equity-to-assets ratio	Net assets
				per share
	Million yen	Million yen	%	Yen
FY2018	329,537	220,826	66.8	1,112.87
FY2017	291,126	155,528	53.2	865.73

(Reference) Shareholders' Equity at the end of each fiscal period: FY2018 (Y) 220,164 million; FY2017 (Y) 154,990 million

Status of Audit Procedures

This consolidated financial results report is not subject to audit procedures by independent auditors.

Explanation on the Appropriate Use of Future Earnings Projections and Other Special Instructions This document contains "forward-lookingstatements" that are based on Advantest's current expectations,

estimates and projections. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause Advantest's actual results, levels of activities, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. These factors include: (i) changes in demand for the products and services produced and offered by Advantest's customers, including semiconductors, communications services and electronic goods; (ii) circumstances relating to Advantest's investment in technology, including its ability to timely develop products that meet the changing needs of semiconductor manufacturers, communications network equipment and components makers and service providers; (iii) significant changes in the competitive environment in the major markets where Advantest purchases materials, components and supplies for the production of its products or where its products are produced, distributed or sold; and (iv) changes in economic conditions, currency exchange rates or political stability in the major markets where Advantest procures materials, components and supplies for the production of its principal products or where its products are produced, distributed or sold.

Advantest Corporation (FY2018)

Contents
1.	Overview of Business Results･････････････････････････････････････････････････		P.	2
	(1)	Overview of Business Results for FY2018･･･････････････････････････････････	P. 2
	(2)	Overview of Financial Condition for FY2018･････････････････････････････････	P.	4
	(3)	Overview of Cash Flows for FY2018･･･････････････････････････････････････	P. 4
	(4)	Near-termProspects ････････････････････････････････････････････････････	P.	5
2.	Basic Approach to the Selection of Accounting Standards ･･････････････････････････		P.	5
3.	Consolidated Financial Statements and Main Notes･･･････････････････････････････		P.	6
	(1)	Consolidated Statement of Financial Position････････････････････････････････	P.	6

(2)Consolidated Statement of Profit or Loss and Consolidated Statement of Comprehensive Income･･･････････････････････････････････････････････････････････････ P. 8

(3)	Consolidated Statement of Changes in Equity･････････････････････････････････		P. 10
(4)	Consolidated Statement of Cash Flows ･･････････････････････････････････････		P. 11
(5)	Notes to the Consolidated Financial Statements････････････････････････････････		P. 12
	(Notes on Going Concern)･････････････････････････････････････････････････		P. 12
	(Changes in Accounting Policies) ･･･････････････････････････････････････････		P. 12
	(Segment Information)････････････････････････････････････････････････････		P. 13
	(Per Share Information)････････････････････････････････････････････････････ P. 14
	(Significant Subsequent Events)･････････････････････････････････････････････		P. 14
FY2018 Consolidated Financial Results Overview･･････････････････････････････････ P. 15Change
in Directors and Executive Officers････････････････････････････････････		P. 16

1

Advantest Corporation (FY2018)

1.Overview of Business Results

(1)Overview of Business Results for FY2018

1)Consolidated Financial Results of FY2018 (April 1, 2018 through March 31, 2019)

			(in billion yen)
			As compared to the
	FY2017	FY2018	previous fiscal year
			increase (decrease)
Orders received	247.8	275.2	11.1%
Net sales	207.2	282.5	36.3%
Operating income	24.5	64.7	2.6 times
Income before income taxes	24.3	66.2	2.7 times
Net income	18.1	57.0	3.1 times

During Advantest's FY2018, the global economy has continued to maintain its growth trajectory overall mainly due to steady economic growth in the United States. Nevertheless, concerns about the future of the global economy have grown since the autumn of 2018 mainly due to the expansion of protectionist trade policies and the slowdown in growth in China.

Amid these trends in the global economy, the sense of a slowdown in data center investment and in the smartphone market, that have led growth in semiconductors and related industries for the last few years, has intensified. As a result, a slackness in supply and demand across the entire semiconductor market has become clearly evident with major semiconductor manufacturers cutting back on their capital investment plans and moving towards substantial inventory adjustments since the second half of 2018. On the other hand, demand for performance improvements in electronic devices such as data servers, smartphones, displays, and car electronics has remained steady, promoting improved performance and an increase in quantity of semiconductors, which are incorporated into such electronic devices. Semiconductor manufacturers have responded by making active efforts to strengthen their testing capabilities for handling more complex testing and enhancing the reliability of semiconductors, which is directly related to improved performance of the end products. As a result, the demand for semiconductor test equipment has remained robust.

In this business environment, Advantest expanded its market share by demonstrating its strength as a manufacturer with the most comprehensive product portfolio in the semiconductor test equipment industry and capturing demand for new products from a broad range of customers.

As a result, orders received were (Y) 275.2 billion (11.1% increase in comparison to the previous fiscal year), net sales were (Y) 282.5 billion (36.3% increase in comparison to the previous fiscal year), operating income was (Y) 64.7 billion (2.6 times increase in comparison to the previous fiscal year), income before income taxes was (Y) 66.2 billion (2.7 times increase in comparison to the previous fiscal year), and net income was (Y)

57.0billion (3.1 times increase in comparison to the previous fiscal year), representing an increase in profit year on year. The average currency exchange rates in the current fiscal year were 1 USD to 110 JPY (111 JPY in the previous fiscal year) and 1 EUR to 129 JPY (129 JPY in the previous fiscal year). The percentage of net sales to overseas customers was 94.7% (93.2% in the previous fiscal year). The operating income for the current consolidated fiscal year includes a one-off profit of (Y) 3.5 billion including (Y) 2.5 billion associated with the transfer of a portion of the defined benefit pension plan for the employees of Advantest Corporation and its subsidiaries in Japan to a defined contribution pension plan.

Conditions of business segments are described below.

2