Kyocera : Conference Call Material (For the Three Months Ended June 30, 2020)

July 30, 2020

Conference Call Material

(For the Three Months Ended June 30, 2020)

Hideo Tanimoto

President and Representative Director

This is an English translation of the Japanese original. This translation is prepared for the reference and convenience solely for those who do not use Japanese. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail.

1. Financial Results for the Three Months Ended June 30, 2020

1

Financial Results for Q1 of FY3/2021

(Unit: Yen in millions)

		Three months ended June 30,	Change
		2019		2020
		Amount		% to sales	Amount		% to sales	Amount	%
			revenue		revenue
Sales revenue		384,937		100.0%	317,094		100.0%	-67,843	-17.6%
Operating profit	22,629		5.9%	7,574		2.4%	-15,055	-66.5%
Profit before income taxes	45,486		11.8%	30,411		9.6%	-15,075	-33.1%
Profit attributable to owners of the parent	32,037		8.3%	22,380		7.1%	-9,657	-30.1%
Capital expenditures	25,821		6.7%	26,458		8.3%	637	2.5%
Depreciation charge of property, plant	14,317		3.7%	17,065		5.4%	2,748	19.2%
and equipment
R&D expenses		18,866		4.9%	17,355		5.5%	-1,511	-8.0%
Average	US$	110 yen	108 yen
exchange rate	Euro	123 yen	118 yen

(Reference) Foreign currency fluctuation effect on sales revenue and profit before income taxes for Q1 of FY3/2021 compared with

the previous same period. Sales revenue: Approx. -6.0billion yen / Profit before income taxes: Approx. -1.5billion yen

Decrease in sales revenue and profit mainly due to the impact of COVID-19

2

Sales Revenue by Reporting Segment for Q1 of FY3/2021

- Compared with Q1 of FY3/2020 -

(Unit: Yen in millions)

				Three months ended June 30,		Change
				2019		2020
			Amount		% of sales	Amount		% of sales		Amount	%
				revenue		revenue
		Industrial & Automotive Components Group		79,330		20.6%	80,596		25.4%	1,266	1.6%
		Semiconductor Components Group		57,973		15.1%	56,124		17.7%	-1,849	-3.2%
		Electronic Devices Group		83,203		21.6%	61,440		19.4%	-21,763	-26.2%
	Total Components Business		220,506		57.3%	198,160		62.5%	-22,346	-10.1%
		Communications Group	※	64,781		16.8%	49,737		15.7%	-15,044	-23.2%
		Document Solutions Group		87,130		22.6%	60,058		18.9%	-27,072	-31.1%
		Life & Environment Group	※	16,866		4.4%	12,362		3.9%	-4,504	-26.7%
	Total Equipment & Systems Business		168,777		43.8%	122,157		38.5%	-46,620	-27.6%
		Others		4,110		1.1%	3,757		1.2%	-353	-8.6%
		Adjustments and eliminations	※	-8,456		-2.2%	-6,980		-2.2%	1,476	-
	Sales revenue		384,937		100.0%	317,094		100.0%	-67,843	-17.6%

※On April 1, 2020, a domestic subsidiary Kyocera Communication Systems Co., Ltd., which is included in "Communications Group," absorbed and merged with a domestic subsidiary Kyocera Solar Corporation, which was included in "Life & Environment Group." As a result, "Three months ended June 30, 2019" in the above table is presented in the reporting segment after the merger.

3

Business Profit (Loss) by Reporting Segment for Q1 of FY3/2021

- Compared with Q1 of FY3/2020 -

(Unit: Yen in millions)

				Three months ended June 30,		Change
				2019		2020
			Amount		% to sales	Amount		% to sales	Amount	%
				revenue		revenue
		Industrial & Automotive Components Group		4,798		6.0%	1,666		2.1%	-3,132	-65.3%
		Semiconductor Components Group		5,082		8.8%	5,623		10.0%	541	10.6%
		Electronic Devices Group		13,418		16.1%	2,407		3.9%	-11,011	-82.1%
	Total Components Business		23,298		10.6%	9,696		4.9%	-13,602	-58.4%
		Communications Group	※	2,012		3.1%	1,697		3.4%	-315	-15.7%
		Document Solutions Group		8,966		10.3%	1,809		3.0%	-7,157	-79.8%
		Life & Environment Group	※	-2,555		－	-3,834		－	-1,279	－
	Total Equipment & Systems Business		8,423		5.0%	-328		－	-8,751	－
		Others		-910		－	-633		－	277	－
Total business profit		30,811		8.0%	8,735		2.8%	-22,076	-71.6%
Corporate and others	※	14,675		－	21,676		－	7,001	47.7%
Profit before income taxes		45,486		11.8%	30,411		9.6%	-15,075	-33.1%

※On April 1, 2020, a domestic subsidiary Kyocera Communication Systems Co., Ltd., which is included in "Communications Group," absorbed and merged with a domestic subsidiary Kyocera Solar Corporation, which was included in "Life & Environment Group." As a result, "Three months ended June 30, 2019" in the above table is presented in the reporting segment after the merger.

4

Summary of Financial Results for Q1 of FY3/2021

• 1. Demand declined in main markets due to COVID-19
• • Automotive-relatedmarkets: Sales decreased primarily in Electronic Devices Group due to sluggish automobile production activities
  • Document market: Demand for equipment and consumables decreased along with restrictions on office attendance

• 2. Increased demand for 5G and data center related components
• • Semiconductor Components Group: Increased demand for ceramic packages for crystal and SAW devices for 5G compatible devices and base stations and for optical communication for data centers
• 3. Contribution of M&A in the previous fiscal year
• • Industrial & Automotive Components Group:

SouthernCarlson, Inc. (pneumatic/power tool sales company)

Friatec GmbH ceramics business (ceramic components manufacturing and sales company)

5

Financial Results for Q1 of FY3/2021 by Reporting Segment (1)

Industrial & Automotive Components Group	Semiconductor Components Group
																				Business profit ratio
100.0								（Unit : Yen in billions）							（Unit : Yen in billions）
			79.3				80.6					58.0					56.1
							50.0							10.0%
50.0			6.0%		8.8%
			4.8				2.1%				5.1			5.6
			1.7
0.0											0.0 .0									0
			FY3/2020 Q1		FY3/2021 Q1	FY3/2020 Q1	FY3/2021 Q1

＜Major reasons for change＞

• Increased sales of industrial tools due to contributions from M&A activity in the previous fiscal year

• Decreased sales of automotive-related components such as automotive cameras and cutting tools
• Decreased business profit due to lower sales of automotive -related components and increase in costs particularly in depreciation charge

+

－

+

＜Major reasons for change＞

Ceramic packages for use in 5G capable smartphones and communication infrastructure remained solid

Decreased sales of organic multilayer substrates for automotive

Business profit increased due to cost reductions

6

Decreased sales in the engineering business

Decreased sales of mobile phone

－

－

+ Business profit margin remained at the same level as in the previous first quarter as a result of cost reduction efforts

FY3/2020 Q1

＜Major reasons for change＞

1.7

FY3/2021 Q1

3.1%

2.0

3.4%

64.8

Financial Results for Q1 of FY3/2021 by Reporting Segment (2)

Electronic Devices Group

（Unit : Yen in billions） 100.0

100.0
83.2
	16.1%	61.4
50.0			50.0
			3.9%
13.4	2.4
0.0				0.0 .0
	FY3/2020 Q1	FY3/2021 Q1

＜Major reasons for change＞

• Decreased sales of AVX Corporation, which was affected by automotive-related markets
• Business profits decreased due mainly to lower sales

Communications Group

Business profit ratio

（Unit : Yen in billions）

49.7

0

7

Financial Results for Q1 of FY3/2021 by Reporting Segment (3)

Document Solutions Group

（Unit : Yen in billions）

100.0 87.1

10.3%60.1

50.0	9.0	3.0%

1.8

0.0

FY3/2020 Q1

FY3/2021 Q1

＜Major reasons for change＞

• Increased demand for document solution services

• Decreased demand for printers, MFPs, and consumables resulting from restrictions on office attendance

Life & Environment Group

Business profit ratio

（Unit : Yen in billions）

16.9

12.4

-2.6	-3.8
-10.0		-10.
0.0
FY3/2020 Q1	FY3/2021 Q1

＜Major reasons for change＞

• Decreased sales of solar power generation systems in the smart energy business*

*On April 1, 2020, the "solar energy business" was renamed to the "smart energy business."

8

2. Financial Forecasts for the Year Ending March 31, 2021

9

Outlook for the Year Ending March 31, 2021

Expect businesses to recover commencing from Q2 of FY3/2021 as assumed at the beginning of FY3/2021

＞

（Unit : Yen in billions）

450					414.1
				397.8
400	384.9
350																	317.1
300
								14.2%
250
		11.8%
			9.6%
200					56.4								9.6%
150
45.5	39.7						1.8%		30.4
100
50												7.2
0
FY3/2020 Q1	Q2	Q3	Q4	FY3/2021 Q1

Sales revenue Profit before income taxes Profit before income taxes ratio (%)

Outlook for FY3/2021 Q2

(compared with FY3/2021 Q1 )

• Demand in automotive-related market to bottom out
• Demand for 5G-related products to increase due to seasonality
• Demand for document solutions to recover

0

Please refer to "Cautionary Statements with respect to Forward-Looking Statements" on the last page.

10

Sales revenue: Approx. -36billion yen / Profit before income taxes: Approx. -11.5billion yen

Financial Forecasts for FY3/2021

(Unit: Yen in millions)

			Year ended March 31,	Year ending March	Change
Forecasts unchanged	2020		31, 2021
			Amount		% to sales	Amount	% to sales	Amount	%
				revenue	revenue
Sales revenue		1,599,053		100.0%	1,500,000	100.0%	-99,053	-6.2%
Operating profit	100,193		6.3%	75,000	5.0%	-25,193	-25.1%
Profit before income taxes	148,826		9.3%	120,000	8.0%	-28,826	-19.4%
Profit attributable to owners of the parent	107,721		6.7%	88,000	5.9%	-19,721	-18.3%
EPS (Basic-yen)		297.36		－	242.80	－	-54.56	－
Capital expenditures	106,003		6.6%	100,000	6.7%	-6,003	-5.7%
Depreciation charge of property, plant	62,413		3.9%	75,000	5.0%	12,587	20.2%
and equipment
R&D expenses		79,241		5.0%	80,000	5.3%	759	1.0%
Average		US$	109 yen	105 yen
exchange rate		Euro	121 yen	115 yen

(Reference) Estimated Foreign currency fluctuation effect on sales revenue and profit before income taxes for the year ending March 31, 2021 compared with the previous fiscal year.

Note: Forecast of EPS (Basic-yen) is calculated using the average number of shares outstanding for the three months ended June 30, 2020.

Please refer to "Cautionary Statements with respect to Forward-Looking Statements" on the last page.

11

Sales Revenue Forecasts by Reporting Segment for FY3/2021

- Compared with FY3/2020 -

(Unit: Yen in millions)

			Year ended March 31,	Year ending March	Change
		Forecasts unchanged		2020		31, 2021
				Amount		% of sales	Amount	% of sales	Amount	%
					revenue	revenue
		Industrial & Automotive Components Group		341,093		21.3%	300,000	20.0%	-41,093	-12.0%
		Semiconductor Components Group		247,228		15.5%	239,000	15.9%	-8,228	-3.3%
		Electronic Devices Group		324,113		20.3%	328,000	21.9%	3,887	1.2%
	Total Components Business		912,434		57.1%	867,000	57.8%	-45,434	-5.0%
		Communications Group	※ 270,818		17.0%	259,000	17.3%	-11,818	-4.4%
		Document Solutions Group		359,915		22.5%	320,000	21.3%	-39,915	-11.1%
							67,000	4.5%
		Life & Environment Group	※	73,747		4.6%	-6,747	-9.1%
	Total Equipment & Systems Business		704,480		44.1%	646,000	43.1%	-58,480	-8.3%
		Others		16,737		1.0%	22,000	1.5%	5,263	31.4%
		Adjustments and eliminations	※	-34,598		-2.2%	-35,000	-2.4%	-402	－
	Sales revenue	1,599,053		100.0%	1,500,000	100.0%	-99,053	-6.2%

※On April 1, 2020, a domestic subsidiary Kyocera Communication Systems Co., Ltd., which is included in "Communications Group," absorbed and merged with a domestic subsidiary Kyocera Solar Corporation, which was included in "Life & Environment Group." As a result, "Year ended March 31, 2020" in the above table is presented in the reporting segment after the merger.

Please refer to "Cautionary Statements with respect to Forward-Looking Statements" on the last page.

12

Business Profit (Loss) Forecasts by Reporting Segment for FY3/2021

- Compared with FY3/2020 -

(Unit: Yen in millions)

			Year ended March 31,	Year ending March	Change
		Forecasts unchanged		2020		31, 2021
				Amount		% to sales	Amount	% to sales	Amount	%
					revenue	revenue
		Industrial & Automotive Components Group		15,813		4.6%	13,000	4.3%	-2,813	-17.8%
		Semiconductor Components Group		30,511		12.3%	30,000	12.6%	-511	-1.7%
		Electronic Devices Group		31,744		9.8%	34,000	10.4%	2,256	7.1%
	Total Components Business		78,068		8.6%	77,000	8.9%	-1,068	-1.4%
		Communications Group	※	11,259		4.2%	9,000	3.5%	-2,259	-20.1%
		Document Solutions Group		34,489		9.6%	30,000	9.4%	-4,489	-13.0%
		Life & Environment Group	※	-10,965		－	-14,000	－	-3,035	－
	Total Equipment & Systems Business		34,783		4.9%	25,000	3.9%	-9,783	-28.1%
		Others		-4,484		－	-6,000	－	-1,516	－
Total business profit		108,367		6.8%	96,000	6.4%	-12,367	-11.4%
Corporate and others	※	40,459		－	24,000	－	-16,459	-40.7%
Profit before income taxes		148,826		9.3%	120,000	8.0%	-28,826	-19.4%

※On April 1, 2020, a domestic subsidiary Kyocera Communication Systems Co., Ltd., which is included in "Communications Group," absorbed and merged with a domestic subsidiary Kyocera Solar Corporation, which was included in "Life & Environment Group." As a result, "Year ended March 31, 2020" in the above table is presented in the reporting segment after the merger.

Please refer to "Cautionary Statements with respect to Forward-Looking Statements" on the last page.

13

Initiatives from Q2 of FY3/2021 Onward: Communication Group

Expand B-to-B business

Kyocera's corporate mobile terminal solutions based on the concept of

"secured, long-usage, and comfortable"

Secured

Strengthening security for corporate use

Long-usage

Durability and reliability for safe and long-term usage

Comfortable

Provide solutions that enable operating efficiency

Deploy in various industries

Education and	Wholesaler and
learning support	retailer

Medical and

Constructionwelfare

Significantly reduce the operational burden on our corporate customers

Commenced Kyocera Mobile Support Service

in July

・Support the introduction of mobile device solutions

・One-stop support for kitting, delivery, repairs and recycling

・Provide consistently in Japan

＊Compatible with high-qualityWi-Fi® tablets and high durability smartphones

High-qualityWi-Fi® tablet	High-durability smartphone
KC-T302DT/ZU	DURA FORCE® PRO

Please refer to "Cautionary Statements with respect to Forward-Looking Statements" on the last page.

14

Initiatives from Q2 of FY3/2021 Onward: Document Solutions Group

Expand business domains

Expand commercial inkjet business

TASKalfa Pro 15000c

Respond to diversifying on-demand printing

Features ● High productivity

・High-speed output of 150 pages per minute

・Capable of nonstop printing of up to 9,000 pages per hour

●Outstanding image quality

・Uses uniquely developed ink with excellent light stability and water resistance

Expand solution business・Stable image quality with little image degradation

End-to-end ECM solution service

Input Software

Workflow Software

Output Software

KYOCERA Capture Manager

Date base

Paper

documentsMFPs

Mobile	Folder	systems
devices

KYOCERA Net Manager

Printers and MFPs	Paper
documents
Web browser	Mobile	Folder
	devices

Please refer to "Cautionary Statements with respect to Forward-Looking Statements" on the last page.

15

Cautionary Statements with respect to Forward-Looking Statements

Certain of the statements made in this document are forward-looking statements, which are based on our current assumptions and beliefs in light of the information currently available to us. These forward-looking statements involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors include, but are not limited to the following:

1. General conditions in the Japanese or global economy;
2. Unexpected changes in economic, political and legal conditions in countries where we operate or export;
3. The effect of foreign exchange fluctuations on our results of operations;
4. Intense competitive pressures to which our products are subject;
5. Fluctuations in the price and ability of suppliers to provide the required quantity of raw materials for use in our production activities;
6. Manufacturing delays or defects resulting from outsourcing or internal manufacturing processes;
7. The possibility that future initiatives and in-process research and development may not produce the desired results;
8. Companies or assets acquired by us not produce the returns or benefits, or bring in business opportunities;
9. Inability to secure skilled employees;
10. Damages on our information security systems from cyberattacks, etc. and significant costs in order to recover and maintain the systems;
11. Insufficient protection of our trade secrets and intellectual property rights including patents;
12. Expenses associated with licenses we require to continue to manufacture and sell products;
13. Unintentional conflict with laws and regulations or newly enacted laws and regulations;
14. Environmental liability and compliance obligations by tightening of environmental laws and regulations;
15. Inability to respond to global climate change problems or delay in such response, which may lead to increased costs and negatively impact our corporate brands;
16. Our market or supply chains being affected by plague, infectious diseases, terrorism, wars or similar events;
17. Earthquakes and other natural disasters affecting our headquarters and major facilities as well as our suppliers and customers;
18. Credit risk on trade receivables;
19. Fluctuations in the value of financial instruments held by us;
20. Impairment losses on property, plant and equipment, goodwill and intangible assets;
21. Uncertainty over income tax and deferred tax assets; and
22. Changes in accounting standards.

Due to such risks, uncertainties and other factors, our actual results, performance, achievements or financial condition may be substantially different from any future results, performance, achievements or financial condition expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements included in this document.