Dexerials : FY23Q2 Financial Results (Slide Presentation)

FY23H1 Financial Results

November 1, 2023

Dexerials Corporation

Contents

• FY23H1 Financial Results Summary
• FY23 Earnings Forecast

Disclaimer with respect to earnings and other forecasts

The forward-looking statements including earnings forecasts contained in this document are based on information currently available to us and certain assumptions that we believe are reasonable. Accordingly, we can give no assurance that such statements will prove to be correct. Actual results may differ from the results anticipated in these forward-looking statements due to a variety of factors.

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Highlights

FY23H1 Results

FY23 Forecast

• H1 Sales and profit decreased year on year. However, Q2 sales and profit increased quarter on quarter with the completion of inventory adjustments and seasonal factors.
• The market environment was in line with the initial forecast. However, results for tablets fell below expectations, and regarding fuses, the inventory adjustment for power tools showed the sign of lengthening. Sales for high-end smartphones were moved back due to delays in sensor module production.
• The assumed FX rate for H2 has been revised to 135 JPY/US$.
• Sales of differentiating technology products such as Particle-arrayed anistropic conductive films (ACF) and Smart precision Adhesives will continue to grow. As external environment uncertainty proliferates, we leaves initial forecasts unchanged to take a cautious stance on the recovery of certain applications including tablets, laptop PCs and power tools.
• Shareholder return policy: returning profits to shareholders at a total payout ratio of approx.40% of consolidated profit attributable to owners of the parent company before goodwill amortization.
• An annual per share dividend of 75 yen (an interim dividend of 35 yen, year-end dividend of 40 yen) remains unchanged.

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FY23 Market Trends in Major Final Products and of Dexerials (YoY)

Final		Trend image in the
	market and Dexerials	Comments
products
	H1	H2
Tablets	Market			Although the market momentum is expected to improve in
				H2 compared to H1, recoveries in demand will be weak
	Dexerials			mainly in high-end products.
Laptop PCs	Market			Although the inventory adjustment has been completed
				and the market will recover in H2 compared to H1, final
	Dexerials			demand in H2 for high-end products in particular needs to
			be assessed carefully.
Smartphones	Market			The market is trending toward a moderate recovery in H2.
				We expects to achieve growth that surpasses the market
	Dexerials			due to the increased adoption of particle-arrayed ACFs
			andsensor module related products.
Automotive	Market			Production volume is recovering due to the elimination of
		semiconductor shortages.
				Despite the slowdown in the gasoline-powered vehicle
	Dexerials			market in China, we expects to increase sales of products
			for EVs.

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FY23H1（April 1, 2023 - September 30, 2023）

Financial Results Summary

FY23H1 Financial Results Summary

		22H1	23H1	YoY Change
	(Unit: JPY Mil)		Excluding
				FX Effects
Net Sales	58,197	49,595	-14.8%	-18.3%
Operating Profit	19,590	15,045	-23.2%	-32.2%
Ordinary Profit	18,461	13,569	-26.5%
Net Profit*	12,460	9,475	-24.0%
N	et Profit* per Share	209.25 Yen	163.31 Yen	-22.0%
	(Reference)Before	228.43 Yen	182.99 Yen	-19.9%
	Amort. of Goodwill
EBITDA**	22,960	18,383	-19.9%	-27.7%
EBITDA Margin	39.5%	37.1%	-2.4%Pt	-4.5%Pt

* Profit attributable to owners of parent

** EBITDA = Operating profit + Depreciation expense recorded as operating expenses + Amortization of goodwill

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FY23H1 Changes in Sales by Application* (YoY)

▲86

(Unit: JPY 100 Mil)

22H1	Tablets	Laptop	Smart-	Auto-	Others	FX	23H1
134.0		PCs**	phones	motives			141.0
JPY/US$							JPY/US$

* Includes estimates

**Includes Desktop monitors

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FY23H1 Operating Profit Analysis (YoY)

▲45	Price/Mix
■ Negative Contributors︓Fuses, ACF
(Unit: JPY 100 Mil)
	Volume/Mix
	■ Negative Contributors︓
	Anti-reflection films, Phosphor films

◆EBITDA

(Unit: JPY 100 Mil) 230

184

22H1	Price	Volume	Fixed	FX	23H1
134.0	/Mix	/Mix	Costs,		141.0
JPY/US$			etc.		JPY/US$

22H1 23H1

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Segment Summary

FY23H1 Optical Materials & Components

◆Sales and YoY Change by Category	Net Sales	YoY	◆Operating Profit	Operating Profit 70.7	YoY
236.9	－23%	Analysis (YoY)	－35%
(Unit: JPY 100 Mil)	Excluding	(－26%)		Excluding FX Effects	(－41%)
	FX Effects		EBITDA 80.7	－33%
306.6		(Unit: JPY 100 Mil)

236.9

Optical films －33%（－35%）

(Anti-reflection films, Phosphor films)

		Optical resin materials +2% （－3%）	22H1					23H1
		(Optical Elastic Resin (SVR),		Price	Volume	Fixed	FX
22H1	23H1	Smart precision Adhesives, etc.)		134.0	/Mix	/Mix	Costs,		141.0
				JPY/US$			etc.		JPY/US$
◆Financial Performance			492	554		494
(Unit: JPY 100 Mil)			286
		236			201
					154	180 (+31%)			151		Sales
		41		79	131 (+95%)			127 (-25%)		Operating Profit
		55	(+92%)							EBITDA（YoY）
	18	(+9%)
	FY19	FY20	FY21	FY22		FY23Fcst

(Notes) Net sales of the Optical M&C segment include inter-segment transactions.

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Segment Summary

FY23H1 Electronic Materials & Components

◆Sales and YoY Change by Category	Net Sales	YoY
262.2
(Unit: JPY 100 Mil)			ー6%
		Excluding
				(ー10%)
				FX Effects
279.0	262.2 Adhesive materials ー8%（ー12%）
			Anisotropic conductive films (ACF) +11%（+6%）
			Surface mounted type fuses ー55%（ー58%）
			Micro devices ー22%（ー26%）
			Optical semiconductor ー17%（ー19%）
	22H1	23H1

◆Operating Profit	Operating Profit 88.7	YoY
Analysis (YoY)	ー7%
Excluding FX Effects
(Unit: JPY 100 Mil)	(ー20%)
EBITDA 103.2	ー6%

22H1	Price	Volume	Fixed	FX	23H1
134.0	/Mix	/Mix	Costs,		141.0
JPY/US$			etc.		JPY/US$

◆Financial Performance	472	515	515
(Unit: JPY 100 Mil)	342	374

					170		190		168
					161	(+11%)
			97	153	(+76%)	141	(-11%)
	67
	76	(+45%)
46	(+13%)
FY19	FY20	FY21	FY22	FY23Fcst

Sales

Operating Profit

EBITDA（YoY）

(Notes) Net sales of the Electronic M&C segment include inter-segment transactions.

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