Marumae : Presentation Material for Financial Results Q2 FY2021

Tokyo Stock Exchange (TSE): 6264

Note : This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

MARUMAE CO., LTD.

Q2 FY2021 Financial Results Summary

March 30, 2021

TECHNOLOGY FOR THE FUTURE

Vacuum components manufacturer for semiconductor and FPD production equipment

Marumae Co., Ltd. All Rights Reserved

1. Overview of Financial Results

P/L Analysis

	P/L	Fiscal Year Ended	Fiscal Year Ending
	Aug 2020			Aug 2021
		Six-month period		Six-month period
		Amount	Ratio	Amount	Ratio	YoY change ratio
		(million yen)	(%)	(million yen)	(%)	(%)
	Orders received	2,032	ー	2,526	ー	24.3
	Balance of the	803	ー	1,077	ー	34.0
	orders received
	Net sales	2,018	100.0	2,299	100.0	13.9
	Cost of sales	1,412	70.0	1,588	69.1	12.4
	Gross profit	605	30.0	710	30.9	17.3
	Selling and	240	11.9	286	12.5	19.1
	administrative
	expenses
	Operating profit	364	18.1	424	18.4	16.2
	Ordinary profit	341	16.9	422	18.4	23.7
	Extraordinary	ー	ー	0	0.0	ー
	loss (income)
	Net profit	237	11.8	294	12.8	23.9
	EPS (yen)	18.22	ー	23.01	ー	26.3
Marumae Co., Ltd. All Rights Reserved			-2-

Point

1. Status of orders received

Semiconductor sector: 1,988 million yen (29.6％ YoY increase)

FPD sector: 394 million yen (18.3％ YoY decrease)

Other sectors: 143 million yen (891.1％ YoY increase)

2. Net sales

13.9％ YoY increase

*The details for each sector are listed on the next page.

3. Cost of sales and gross profit

Material cost: 37 million yen decrease (10.8％ YoY decrease)

Outsourcing expenses: 45 million yen increase (19.9％ YoY increase)

Labor costs: 63 million yen increase (14.7％ YoY increase)

Depreciation: 41 million yen increase (17.6％ YoY increase)

4. Operating profit and selling and administrative expenses

Personnel expenses: 27 million yen increase

Fee expenses: 21 million yen increase (unplanned)

Other sectors: 94 million yen (759.6％ YoY increase)

1. Overview of Financial Results

Trend of Quarterly Business Results

(Unit:		Sales/cutting (semiconductor)		Sales/cutting (FPD)			Sales/cutting (other)		Fiscal Year
	Other sales			Gross profit			Operating profit			Ending
million yen)
	Ordinary profit			Net profit							August 2021
1,200		293	273
									277		76
										251
				244								111
1,000									276			164
237						198
									977
			944
		907					263			904	893
800			871	111				884
				831
791					102
				771			766
600						707
							648
400													376
													223
200													222
													156
0	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q
		FY2018			FY2019					FY2020			FY2021

Point

1. Record sales for semiconductor, but stagnant FPD

	Semiconductor sector: 1,870 million yen (32.2％ YoY increase)		• Substantial increase in orders related to smartphone cases and solar cell
		production equipment
	• Accelerated recovery in the semiconductor from the second half of Q1,
	2. Higher profit & loss due to an increase in orders with low
	leading to record-high sales
	FPD sector: 275 million yen (48.9％ YoY decrease)		material and outsourcing costs
		• Net income: 294 million yen (23.9％ YoY increase)
	• Sales drop due to market stagnation
	*The graph shows quarterly figures, but the numbers in the comments for each point are those for the six months under review.
Marumae Co., Ltd. All Rights Reserved	-3-

1. Overview of Financial Results

B/S Analysis

	B/S	Fiscal Year Ended	Fiscal Year Ending
	Aug 2020	Aug 2021
	(Unit: million yen)	End of fiscal year	End of Q2
	Current assets	4,369	4,088
	Cash & deposits	2,540	2,161
	Trade receivables
	(Notes receivable - trade,	1,376	1,469
	accounts receivable - trade, and
	electronically recorded monetary
	claims - operating)
	Inventories	438	430
	Non-current assets	4,524	4,600
	Buildings & land	2,359	2,331
	Machinery & equipment	1,775	1,866
	Current liabilities	1,183	1,031
	Interest-bearing liabilities	389	389
	(short-term)*
	Non-current liabilities	2,004	1,811
	Long-term borrowings	1,970	1,775
	Total liabilities	3,188	2,842
	Total net assets	5,706	5,847
	Total assets	8,894	8,689
	*Interest-bearing liabilities: Short-term borrowings + Current portion of long-term borrowings
Marumae Co., Ltd. All Rights Reserved		-4-

1. Assets: 8,689 million yen (decreased by 204 million yen Point from the end of the previous fiscal year)
2. • Property, plant and equipment: 89 million yen increase
   • Trade receivables: 93 million yen increase
   • Cash and deposits: 378 million yen decrease
3. Liabilities: 2,842 million yen (decreased by 345 million yen from the end of the previous fiscal year)
4. • Long-termborrowings: 194 million yen decrease
   • Income taxes payable: 104 million yen decrease
5. Net assets: 5,847 million yen (increased by 140 million yen from the end of the previous fiscal year)
6. • Dividends paid: 153 million yen
   • Booking of net profit: 294 million yen
   • Equity ratio: 64.2％→67.3％

(Unit:		Long-term borrowings
	Current portion of long-term borrowings					Fiscal Year
million yen)
								Ending
2,500			379						August 2021
			379	379
			339		379
					379	389
	309	309				389
2,000
									389
1,500
519
			2,357	2,262	2,167
1,000			2,092	2,072
1,977		1,978	1,970
		1,873
			1,899						1,775

500 1,071

0

Term-

Term-

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

end

end

FY2019

FY2020

FY2021

FY

FY

2017

2018

2. Business Environment

Trend of the Monthly Balance of Orders Received

1,200

1,100

1,000

900

800

700

600

500

400

300

200

100

0

	(Unit: million yen)																																																	Fiscal Year Ending
	7		6		10		8											Semiconductor sector																																			August 2021
																	FPD sector
									7
																	Other sectors																																															55
	323		362		360		344																																													4																		88
								322		37																																							6			4
																																																								5		4										23				324
																																																														49						225
											239																																					8				322								6		8				41
																																						5		3		4				5
													22		3													4		6		4				4					7					294				291		251								176				205
													147			26		4		4				3								4														283									262		205		189			195
														158		174		164			4			185		191		206										312				273
											174							246				337		322			275
																								157		169									340
	788		814		785		811		741		675																																																									654		696		697
												606																																					599		624		607		599						590		639		589
														571																																							581		579
															534		540		521		458		490		555		548		536		460				429		438		459		462		498		511
																																		391

Mar Apr May Jun	Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun	Jul Aug Sep Oct. Nov Dec Jan Feb Mar Apr May Jun	Jul Aug Sep Oct Nov Dec Jan Feb
FY2018	FY2019	FY2020	FY2021

Point  Semiconductor sector: The rapid recovery for memory pushed up orders, but the increase in backlog was lower than the previous peak due to improved production capacity.

• FPD sector: Strong orders for G6 organic EL (OLED); emerging effects of market share gains such as increased orders from new customers
• Other sectors: Expanding order backlog for smartphone cases and solar cell production equipment

*The company's orders have varying lead times. When there are many orders with a long lead time, the order backlog tends to be high compared to sales, and the reverse is true when there are many orders with a short lead time.

Marumae Co., Ltd. All Rights Reserved	-5-

2. Business Environment

Future Environment and Policies by Sales Sector

Semiconductor

FPD

Others

• Increased investment by memory companies and logic foundries*
• Strongest market outlook for 2021 due to the expansion of logic investment
• Expanding market share gains by strengthening prototype and active capital investment
• Growing market environment for smartphone OLED
• Rapid market recovery and increase in market share (acquisition of new process + withdrawal from other companies in the same industry)
• Strengthening one-stop orders of pre- and post-processes by utilizing EBW and our internal transportation system
• Continuing to receive inquiries for new energy business such as solar cells
• Aiming to receive orders to fill the surplus production capacity in the FPD and semiconductor fields

*Foundry: A contracted manufacturer that produces semiconductor based on the design data from its customers.

Marumae Co., Ltd. All Rights Reserved	-6-

3. Forecast of the Financial Results for FY2021

Forecast for This Period (Profit/Loss, Capital Investment, and Fixed Cost)

Financial	Net	Operating	Ordinary	Net profit	Net profit
Sales	profit	profit
Forecast	(million	per share
(million	(million	(million
for FY2021	yen)	(yen)
yen)	yen)	yen)
Full year	4,980	1,020	1,000	705	55.07

Full-year sales and profit revised upwards, following the first half (disclosed on Mar. 30, 2021)

Further improvements of the market environment

Point

• Upward revision of full-year earnings forecast due to favorable market environments
• Active capital investment for the next fiscal year
• Corporate research expenses related to M&A incurred ahead of schedule (because it was unfulfilled); slightly lower P/L in the first half than the forecast
• Dividend forecast revised to 12 yen at the end of the term and 22 yen for the full year

(Unit:		Sales/cutting (semiconductor)						(Unit:		Capital investment
million yen)						Forecast	million yen)							Forecast
5,000		Sales/cutting (FPD)
							2,500		Depreciation (manufacturing)
		Sales/cutting (other)
							756
		Other sales				1,060					Personnel expenses
4,000		Gross profit					1,068				(manufacturing)
	Operating profit					3,949	2,000
					657
		Ordinary profit
3,000		Net profit				3,410	3,181	3,202
						771					1,500
2,000					947	2,150												2,462			1,044
				575																919
										1,000								902
1,000																	849
			1,172	1,205
528	628	398														1,496
		728														628			597
	490	485												454	510			510
									500						448
0										335	362
										310			683	334
																820
												139			110	303				341
												109	101	210
-1,000													149
										0	13	58	85	185
FY2012	FY2013	FY2014	FY2015	FY2016	FY2017	FY2018	FY2019	FY2020	FY2021
FY2016	FY2017	FY2018	FY2019	FY2020	FY2021
										(Forecast)		FY2012	FY2013	FY2014	FY2015
											*The amount of capital investment is based on cash flow.		(Forecast)
Marumae Co., Ltd. All Rights Reserved						-7-

4. Medium-term Business Plan "Innovation 2022"

Status of the Numerical Targets Planning Period until the End of Aug 2022

Medium-term Business Plan

Innovation 2022

Numerical	Total Sales
Targets
	Operating Profit

7.0B

2.0B

yen

yen

Sales 5.2B yen

Semiconductor

Sector

･Two of new customers: Expanding and progressing acquisition of certification

• Existing customers: Expanding the share by focusing on consumable products

FPD	Sales 1.6B yen
Sector	･Increasing in orders related to electron beam welding
	･Expanding the share due to competitors' withdrawal

	*Sales for other sectors are expected to be 200 million yen.
Marumae Co., Ltd. All Rights Reserved	-8-

4. Medium-term Business Plan "Innovation 2022"

Target Market and Share Trends

(Market size)	Market Size and Our Market Share *Light blue and yellow: our forecast (Share)
(Unit: hundred million yen)

1,200							7%
Market size	Our sales	Our share				6%
1,000
800							5%
600							4%
						3%
400							2%
200							1%
15.9	21.2	22.4	30.4	45.9	40.2	43.9	47.0
0							0%
2014	2015	2016	2017	2018	2019	2020	2021

GROWTH POTENCIAL

• The semiconductor and FPD sectors reached their peak in 2018. Thereafter, the semiconductor sector fell slightly but is now on the recovery, while the FPD market remains sluggish due to a large decline in that field.
• We continue to expand our market share despite the stagnation experienced by other companies in the industry by acquiring new customers and increasing prototype orders for mass production.

• The market size data above reflects the sales data that we have compiled for a reference group of 30 companies (including us) that we have identified that make vacuum components similar to those that we supply. The sales data for each calendar year is based on the end of the fiscal year from each company.
• Some of the numbers in the 2021 data include figures that we predicted from the closing month and order details of each company.

Marumae Co., Ltd. All Rights Reserved	-9-

We are promoting sustainable management to

contribute to society with our technology.

Marumae Co., Ltd. All Rights Reserved	-10-

Notes

The information listed in this material and the contents that have been orally explained and have not been realized yet are outlooks based on certain assumptions, and they include uncertain elements such as evaluation by the Marumae management.

This material was prepared for shareholders and investors to understand the current status and management policy of Marumae, and does not provide readers with the basis to make any investment decision, such as the purchase and sales of the shares of the Company. The Company bears no responsibility for any investment decision.

Although the Company took care in preparing the listed information including numerical figures, this material contains many numerical figures that have not been audited. Therefore, the Company does not assure their accuracy. Moreover, the Company does not bear any responsibility for the information listed and any errors contained for any reason.

For inquiries regarding this material, please contact the following:

Person in charge of IR, General Affairs Section, Administration Division, Marumae Co., Ltd.

E-mail:[e-mail]

Marumae Co., Ltd. All Rights Reserved	-11-

Marumae Co., Ltd. All Rights Reserved	-12-

Reference (Our History)

We originally started from motorcycle racing.

Marumae Co., Ltd. All Rights Reserved	-13-

Reference (Our History & Business Transition)

Founding

Phase

Transition

Phase

Expansion

Phase

Rebuilding

Phase

Regrowth

Phase

1965	Founded Marumae Kogyo, Ltd. as a private
	company.
	T's	M's
1988	Became a limited company.
1997	Took over T's M's R&D.	R&D
	Manufactured motorcycle parts.	(started
		manufacturing
2000	Entered the semiconductor market.	motorcycle parts)
2001	Renamed company name to Marumae Co., Ltd.
Became a stock company.
	Relocated the HQ to the Takaono
2003	factory.
	Installed large-sized machining equipment.
2004	Designated as Green Sheet stock.
2006	Listed shares on the TSE Mothers market.
2007	Opened the Kumamoto factory.
2008	Opened the Kanto factory.
2011	Closed the Kumamoto factory.
2011	Started implementing business revitalization
	ADR procedures.
2015	Completed the business revitalization ADR
procedures.
2018	Acquired the Izumi factory.
	Listed shares on the 2nd section of TSE.
	Listed shares on the 1st section of TSE.
2019	Relocated the HQ to the Izumi factory.

MARUMAE

(Kept the company name)

Ｒ＆Ｄ

(our current business)

Business

growth with large-sized products

Focus on

semiconductor

and

engineering

skills

Motorcycle parts

to

industrial parts

Accumulate

know-how on

vacuum

components

2008

Financial

Crisis

Return to

the starting point

EVOLUTION

Marumae Co., Ltd. All Rights Reserved	-14-

Reference (Our History & Business Transition)

Business Growth & Growth Driver

Sales

Payroll

(Unit: hundred million yen)

Regrowth of

Number

60

Assembly

300

55

Others

semiconductor & FPD

50

Solar Cell

2008

250

45

FPD

Completed

Financial

the business

Crisis

40

Semiconductor

revitalization

200

35

Payroll Number

plan

Started business

30

150

Listed on the

revitalization

25

ADR procedures

TSE Mothers

20

Market

100

15

Change in

10

50

fiscal term

5

0

0

(Fiscal

'03

'03

'04

'05

'06

'07

'08

'09

'10

'11

'12

'13

'14

'15

'16

'17

'18

'19

'20

'21

Year)

(Mar)

(Aug)

(Forecast)

Expansion phase

Restructuring

Regrowth

	•	Large-sized
		equipment
Develop	•	Expansion of
engineering		manufacturing
skills		capacity
	•	Assembly
		business

	•	Organizing large-
FPD		sized equipment
•	Redistributing
Solar Cell		manufacturing
	capacity
	•	Strengthening
		vacuum
		components

Strengthen

semiconductor

Marumae Co., Ltd. All Rights Reserved	-15-

Reference (Business Overview)

Our products support the core of semiconductor

and LCD production equipment worldwide

Main processes of our customers that use our products

Etching

CVD

Coater/developer

Sputtering

Single wafer cleaning

Ashing

Wafer bonding

Ion implantation

Annealing

Our main products

Vacuum chamber

Shower head

Exhaust plate

Electrostatic chuck

Heater

Upper electrode

Target

Parts for transfer system

Various vacuum components

* This photo is a sample image

Marumae Co., Ltd. All Rights Reserved	-16-

Reference (Company Overview)

Company	Marumae Co., Ltd.	Total number of			13,053,000 shares
name	issued shares
Establishment	October 1988	Share unit			100 shares
Capital	1,241,150,000 yen (as of February 28, 2021)	number
		Total number of
	• Toshikazu Maeda, President and Representative Director			8,419
	•	Kota Kaizaki, Director	shareholders
	•	Hiroto Ando, Director
	• Akiko Kadota, Outside Director		•	Toshikazu Maeda	4,818,700 shares
	•	Yoshitsugu Kojima, Director		• The Master Trust Bank of
		(Audit and Supervisory Committee Member)
				Japan, Ltd.	558,900 shares
Executives	•	Keiji Hokanishi, Director
		(Trust account)
	(Audit and Supervisory Committee Member)
	• Satoshi Momokino, Outside Director		•	Misako Maeda	504,000 shares
		(Audit and Supervisory Committee Member)		• Custody Bank of Japan, Ltd.
	• Takaaki Yamamoto, Outside Director		181,600 shares
			(trust account)
		(Audit and Supervisory Committee Member)
	•	Hirotsugu Miyakawa, Outside Director	Major	•	Yoshiko Maeda	180,000 shares
		(Audit and Supervisory Committee Member)	shareholder	•	Tadao Kawamoto	175,800 shares
Number of	252 (including 110 temporary workers) and 26 dispatched
(Common
employees	workers (as of February 28, 2021)	shares)	•	Koei Igarashi	168,000 shares
	•	Izumi Factory (Headquarters):		•	SMBC Nikko Securities Inc.	140,800 shares
		2141 Onohara, Izumi, Kagoshima 899-0216, Japan
	•	Takaono Factory:		•	Marumae Kyoeikai	135,200 shares
Locations
	3816-41 Okubo, Takaono, Izumi, Kagoshima 899-0401,		• Custody Bank of Japan, Ltd.	128,400 shares
	Japan			(trust account 5)
	•	Kanto Factory:			(Note) There are 250,196 treasury shares.
		2-17-15 Hizaori, Asaka, Saitama 351-0014, Japan			(as of February 28, 2021)
	• Design, manufacturing and machining of precision	Management	•	Seek technological perfection
		machineries and equipment	philosophy	•	Respect competition and cooperation
	• Design and manufacturing of precision machine		• Contribute to society as a company that focuses
		components			on technology
Business	• Design, manufacturing and sales of industrial and		We focus on parts machining, which is the foundation
	medical equipment		of the monozukuri (manufacturing) that supports our
description
•	Development and sales of software		economy.
	•	Plate working		To become a company that can support
	•	Plumbing		comprehensive manufacturers in various areas, we
	•	Transportation		aim to be a leading parts machining company with
	•	Real estate leasing		advanced technology and supply capability.

Marumae Co., Ltd. All Rights Reserved	-17-