FY2021 Q1 Financial Announcement

FY2021 Q1

Financial Announcement（Supplementary Materials）

August 7,2020V-Technology Co., Ltd.

Copyright(C) 2020 V Technology Co., Ltd. All Right reserved.1

▐Forward-Looking Statements

▶ This material contains forward-looking statements regarding V Technology Co., Ltd.̓s corporate plans, strategies, forecasts, and other statements that are not historical facts. They are based on current expectations, estimates, forecasts and projections about the industries in which V Technology Co., Ltd. operates.

▶ As the expectations, estimates, forecasts and projections are subject to a number of risks, uncertainties and assumptions, including without limitation, changes in economic conditions; fluctuations in currency exchange rates; changes in the competitive environment; the outcome of pending and future litigation; and the continued availability of financing and financial instruments and financial resources, they may cause actual results to differ materially from those presented in such forward-looking statements.

▶ V Technology Co., Ltd., therefore, wishes to caution that readers should not place undue reliance on forward-looking statements, and, further that V Technology Co., Ltd. undertakes no obligation to update any forward-looking statements as a result of new information, future events or other developments.

Copyright(C) 2020 V Technology Co., Ltd. All Right reserved. 2


┃Financial Result

▐Impact of the spread of the new coronavirus


▶ Sales declined in the previous fiscal year's fourth quarter (Jan.-Mar.), but recovered in this first quarter (Apr.-Jun.), and almost all the projects that were extended from the previous fiscal year's fourth quarter to this fiscal year's sales are expected to be sold during the first half.

▶ Installed products at the customers' locations, especially overseas, under instructions from governments and customers to ensure safety.

▶ Installation work speed is improving with gradually resuming production activity in China, although we can travel from Japan to China on a limited basis.

▶ Meanwhile, even before the corona disaster, we began to transfer equipment installation and other work to local staff in China. It is expected that local staff will perform almost all equipment installation work from next year.

▶ We give top priority to the health and safety of our employees, their families, business partners, and all other concerned parties. We have also implemented thorough preventive measures at each of our bases, including telecommuting and business travel restrictions.

▶ From the end of March to May 25, all employees at the Yokohama Head Office worked at home. 85% of employees worked at home during this period, and from May 26 to June 30, approximately 50% of employees worked under a work schedule of 50%.

▶ From July 1, we transitioned to a new work system in which telecommuting is the core of work performance. Under the new system, we aim to ensure employee safety, improve work-life balance and operational efficiency, and reduce office costs.

Operation

Business

▐Highlight of FY2021 Q1▶ Sales dropped to 3.6 billion yen in the previous fiscal year's fourth quarter (January-March), but recovered

quickly in the first quarter (April-June).▶ Announced large orders in April, confirming a recovery in orders and resumption of negotiations▶ Consolidated Q1 revenue and income decreased due to the impact of sales delays caused by the new corona,

despite an improvement in profit margins in the manufacturing and inspection equipment businesses.


FY20Q1 ended

FY21Q1 ended Y/Y

changeAmount(Millions of JPY) Margin Amount

(Millions of JPY) Margin

Net sales 18,910 100.0％ 10,297 ― ▲45.5％

Gross profit 6,502 34.4％ 3,173 30.8％ ▲51.2％

Operating profit 3,721 19.7％ 1,192 11.6％ ▲68.0％

Ordinary profit 3,676 19.4％ 1,142 11.1％ ▲68.9％Net profitattributable to owners of parent

2,283 12.1％ 644 6.3％ ▲71.8％

Orders received 5,344 ー 12,434 ― 132.7％

Backlog 77,369 ー 61,281 ― ▲20.8％

▐Transition of Orders Received and Backlog▶ Orders in Q1 recovered to 12.4 billion yen due to large orders (10 billion yen / disclosed on April 23) and

other factors.▶ Cancellation of overseas projects (approx. 3.3 billion yen) that investment was significantly delayed.▶ The impact of order cancellation has already been factored into the business plan at the beginning of the

fiscal year, so there is no change to the earnings forecast.


FY17 FY18 FY19 FY20 FY21

（Millions of JPY）

50,377

58,047

72,260 72,381

89,546

97,723

103,477

115,637 114,997

100,800

87,030 90,935

77,369 73,903

61,067 59,145

61,281

17,807 16,372

22,672 18,235

25,219 23,366 23,742

36,996

14,861

8,406

3,855

20,308

5,344

12,670

2,832 1,686 12,434

0

30,000

60,000

90,000

120,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Backlog Orders received

10,650

6,677

1,406

177

18,910

3,508

5,559

775 454

10,297

0

5,000

10,000

15,000

20,000

Manufacturing

equipment

Inspection

equipment

After service Other

businesses

Total

FY20 Q1 FY21 Q1

▐Sales by Products and Services（YoY basis）


<FPD related> <Semiconductor/Other>


▐Sales by Countries（YoY basis）


15,512

1,213 239

1,946

18,910

9,145

305 374 473

10,297

0

5,000

10,000

15,000

20,000

China Taiwan Japan Korea/ Others Total

FY20 Q1 FY21 Q1


17 Q1 17 Q2 17 Q3 17 Q4 18 Q1 18 Q2 18 Q3 18 Q4 19 Q1 19 Q2 19 Q3 19 Q4 20 Q1 20 Q2 20 Q3 20 Q4 21 Q1 21 Q2 21 Q3 21 Q4

Sales 10,101 8,703 8,426 18,146 8,055 15,189 17,988 24,835 15,501 22,603 17,624 16,404 18,910 16,136 15,669 3,607 10,297

GP 3,130 2,830 2,814 4,278 2,426 4,855 5,798 8,242 4,846 7,677 7,125 5,496 6,502 4,700 5,532 (1,612) 3,173

OP 1,276 1,163 1,045 1,930 652 2,896 3,473 5,524 2,733 5,632 5,169 3,094 3,721 2,541 3,185 (3,740) 1,192

GPM 31.0% 32.5% 33.4% 23.6% 30.1% 32.0% 32.2% 33.2% 31.3% 34.0% 40.4% 33.5% 34.4% 29.1% 35.3% -44.7% 30.8%

OPM 12.6% 13.4% 12.4% 10.6% 8.1% 19.1% 19.3% 22.2% 17.6% 24.9% 29.3% 18.9% 19.7% 15.7% 20.3% -103.7% 11.6%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

0

5,000

10,000

15,000

20,000

25,000

▐Transition of Quarterly Sales and Profit


（Margin of profit）

Deficit

Deficit


▐SG&A(Selling, general and administrative) Expenses▶ SG&A expenses declined 28.8% year on year

‣ Decrease in shipping and other expenses due to lower sales and lower litigation-related expenses in other items


462 321

527

140

1,331

2,781

461 239

423

19

839

1,981

0

1,000

2,000

3,000

4,000

5,000

Labor Shipping R&D Provision for

product warranties

Other Total

FY20 Q1 FY21 Q1


Included litigation-related expenses Approximately 500 millions

▐Analysis of Operating Profit Deference


▶ 主に新型コロナ影響による売上の減少により、営業利益は67.9％減少▶ Operating income declined by 68.0% due to lower sales, mainly due to the impact of the new coronavirus

Sales declining-2,961

OperatingProfit3,721

FY20 Q1 21年3⽉期Q1

（単位︓百万円）

Changes inProduct mix

-367

Changes inSGA

+799

OperatingProfit1,192

▐Transition of Consolidated Balance Sheets

12,101 17,983

24,132 24,052

24,854 25,050

5,407 2,863 8,651 8,506

0

30,000

60,000

90,000

FY20 FY21 Q1

Total assets

Non-current assetsOther current assetsReceivable trade inventoryNotes and accounts receivable - trade

29,361 29,608

33,794 31,462

11,606 16,971 383 413

0

30,000

60,000

90,000

FY20 FY21 Q1

Liabilities/ net assets

Other non-current liabilitiesLoans payable (short term/ long term)Other current liabilitiesNet assets


75,146 78,454 80,304 75,146

（Millions of JPY）（Millions of JPY）

Copyright(C) 2020 V Technology Co., Ltd. All Right reserved.

｜Business Forecast

13

▐Forecast of 2021


FY20(Actual) FY21(Forecast) compared with the previous forecast

Amount(Millions of JPY) Margin Amount

(Millions of JPY) Margin

Net sales 54,322 ー 54,000 ー -0.6％

Gross profit 5,707 10.5％ 6,000 11.1％ 5.1％

Ordinary profit 6,209 11.4％ 5,800 10.7％ -6.6％

Net profit attributable to owners of parent 3,277 6.0％ 3,000 5.6％ -8.5％

EPS JPY 338.99 JPY 310.25 ー

Dividend

FY21 1st half︓JPY 60 (Forecast) 2nd half︓JPY 60 (Forecast)

*Reference: FY20 1st half︓JPY 80 (Actual) 2nd half︓JPY 40 (Actual)

▶ No change from the earnings forecast disclosed on May 12

288

181

49 25

543

228 232

48 32

540

0

100

200

300

400

500

600

Manufacturing

equipment

Inspection

equipment

Materials / Services Other Total

FY20 FY21

▐ *Reference: Break Down of Net sales in FY2021 Forecast


<FPD related><Semiconductor/

Other>

（Billions of JPY）

▶ No change from the earnings forecast disclosed on May 12

Copyright(C) 2020 V Technology Co., Ltd. All Right reserved.

┃Topics

16

Our Products Related to Local Dimming

Large Glass Substrate Exposure Equipment Defect Repair EquipmentLaser Annealing Equipment

Local dimming technologies

Difference between the screen and the old and new backlight

Backlight Image Original image

Novel tech under R&D

Light and dark control by dividing the screen into 5,000 to 10,000 sections

About 5,000 to 10,000 mini LEDs are used.

Brightness control close to the actual image

Conventional

Control light and dark by dividing the screen into 500 to 1000 sections

About 500 to 1000 LEDs are used.

Limited control of brightness

Manufacturing difficulties increase with the evolution of the screen.

▐FPD


Evolution of FPD technology to stimulate new equipment demand ~Local dimming technologies~

Laser Annealing Equipment(BLDA)

The evolution of smartphone screens and the demand for salvage services

Growing Expectations for Demura Technology

Removal of unevenness by Demura

Kunshan Head Office and Plant started operation in April.

Building

Clean room

▐ESG


CorporateMission

Contributing to society with fervor and great ambition, through our world-class innovative manufacturing solutions.

Long-termVision

We aim to be the world's leading manufacturing solution provider

Medium and Long TermGrowth Strategy(Basic policy)

Business expansion/stabilization of earnings

Strength(Business foundation)

Human resource diversity / Technological diversity / Strong customer base / China sales network / On-site capabilities

Measures M&A/Business partnership / JV / R & D (Innovation Creation) / Fabless / Personnel / Intellectual Property

Annual plan Formulate and implement based on growth strategy

Environment• Climate change (FPD power saving technology)• Resource protection (FPD / semiconductor yield

improvement technology)• Pollution prevention (production activities according to

local environmental laws)

Social• Safety (safety education for employees/device safety

measures)• Social contribution (Support for Judo / Women's Judo

club)• Strengthen supply chain management （Souki-kai）

Governance• Separation of supervision and enforcement• Strengthening risk management• Dialogue with Stakeholder

Prioritized fields : FPD/Materials & Services/Semiconductor

Executive and employee action

guidelines

Have I lacked in spiritual vigor?Have I been responsible for my speech and behavior?

Have I committed myself to work with zeal and effort?

Promoting ESG activities through business activities rooted in the corporate mission and vision


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FY2021 Q1 Financial Announcement

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