OPTEX.CO.,LTD. Consolidated Second Quarter of F.Y. 2010 Presentation (Jan.1 to Jun.30, 2010) August 5th 2010 in Osaka August 6th 2010 in Tokyo 1
. 2010 2QT Consolidated Financial Report Summary of first half Outlook in Business Segments Free Cash Flow. 2010 Prospects. Future Business Focus 2
Summary of first half Net Sales (Unit : Million yen) July: Euro reaches 171 level 6,000 5,000 4,000 5,411 5,096 5,695 4,714 3,647 3,613 4,049 3,815 3,921 4,243 2009 result 2010 forecast 3,000 USD 94 GBP 146 EURO 130 USD 90 GBP 140 EURO 130 2,000 1,000 0 08/1Q 08/2Q 08/3Q 08/4Q 09/1Q 09/2Q 09/3Q 09/4Q 10/1Q 10/2Q 2009 first half result USD 95 GBP 142 EURO 127 2010 first half result USD 91 GBP 139 EURO 121 7,260 8,164 The factor of change in net sales (year-to-year comparison) + 12.5% +904million yen > The control device industry is showing signs of recovery; however, demand for construction will still take time to recover. Security Sensors + 5%,Automatic Door Sensors - 2% Industrial Sensors + 51% > Impact of exchange rate -66 million yen 3
Summary of first half : Operating Income (Unit : Million yen) 1,000 2,500 2,000 Selling, general and administrative expenses Others R&D investment 800 1,500 1,000 1,595 1,672 1,690 1,536 1,396 1,439 1,341 1,344 1,378 1,423 600 400 928 854 842 801 500 0 406 445 451 508 330 357 377 376 360 361 08/1Q 08/2Q 08/3Q 08/4Q 09/1Q 09/2Q 09/3Q 09/4Q 10/1Q 10/2Q 200 0 462 456 547 338 370 287 95 9 58 260 229 178 266 353 311 321 191 424-166 435 59 35 46 99 445 231-200 08/1Q 08/2Q 08/3Q 08/4Q 09/1Q 09/2Q 09/3Q 09/4Q 10/1Q 10/2Q Operating Income Ordinary Income Quarterly Net Income 4
Summary of first half : Factors of change in Operating Income (Unit : Million yen) Gross operating income Selling and administrative Expenses COS% Down +212 Factor 2 Factor 3 Factor 4 Factor 5 Factor 6 Expense Saving +9 Sales Increase +448 Factor 1 Exchange Rate +2 Subsidiaries Expense Drop R&D Expense Increase -35 by Yen rate +26 756 94 09 First half 10 First half 5
Security Sensors Outlook (Unit : Million yen) 3,000 2,635 2,500 2,000 2,408 2,522 2,192 1,609 1,847 1,785 1,975 1,712 1,914 1,500 1,000 500 0 08/1Q 08/2Q 08/3Q 08/4Q 09/1Q 09/2Q 09/3Q 09/4Q 10/1Q 10/2Q 3,456 3,626 Net Sales, Actual: 3,626 million yen(year-on-year change) +5% +170 million yen Japan: Market remains sluggish in the security/electrical materials industries. Overseas:Euro is dragging down results in our main European markets; sales promotions have succeeded in boosting sales. Net sales up 12% year-on-year; sensor shipments up 16% 6
Automatic door Sensors Outlook (Unit : Million yen) 1,600 1,400 1,200 1,459 1,212 1,455 1,172 1,000 800 935 959 924 854 871 825 600 400 200 0 08/1Q 08/2Q 08/3Q 08/4Q 09/1Q 09/2Q 09/3Q 09/4Q 10/1Q 10/2Q 1,789 1,749 Net Sales, Actual : 1,749million yen(year-on-year change) - 2% - 40 million yen Japan: Recovery in demand will take time for automatic door sensors, customer traffic counting systems. Overseas: Sales of sliding door sensors in Europe continue to be strong. Year-on-year growth due to increased market share. 7
Industrial Sensors Outlook (Unit : Million yen) 1,400 1,245 1,200 1,000 938 1,080 1,119 1,078 909 1,020 800 792 707 783 600 400 200 0 08/1Q 08/2Q 08/3Q 08/4Q 09/1Q 09/2Q 09/3Q 09/4Q 10/1Q 10/2Q 1,499 2,265 Net Sales, Actual: 2,265 million yen (year-on-year change) +51% +766 million yen Japan: Sales to food, medical, cosmetics and LCD industries performing well; year-on-year growth in these sectors. Overseas: Expanded capital investment among manufacturers in Europe and Asia (mainly China). 8
Free Cash Flows (Unit : Million yen) Cash Flows of Operating Activities Cash Flows from Investing Activities Cash Flows from Financing Activities (Unit : Million yen) 10,000 Cash and Cash Equivalents 1,500 8,000 7,708 1,000 500 0 822 454 368 942 1,356 1,175 422 753 814 308 368 506 1,096 351 745 6,000 4,000 2,000 5,683 6,347 6,447 6,476-500 414 08 08 09 09 10 first second first second first half half half half half 0 2008 first half 2008 second half 2009 first half 2009 second half 2010 first half >An increase in net cash outflow due to purchases and sales of >exchange rate gain by a drop in the yen 199 million yen marketable securities for cash management purposes led to a year-on-year increase in net cash used for investing activities. 9
. 2010 2QT Consolidated Financial Report. 2010 Prospects. Future Business Focus 10
Projection of second half (year-on-year change) Security Sensors Net Sales +500 M Automatic Door Sensors Net Sales +250 M New Business (e.g.light control System) Net Sales +200M (Unit : Million yen) 12,000 10,000 8,000 6,000 4,000 2,000 0 9,813 first half 1,981 1,105 10,481 second half 1,940 1,177 Industrial Sensors pull forward 11,182 10,985 first half 2,503 1,381 1,572 996 10,507 10,409 1,401 800 Aggressive R&D Investment second half first half 1,088 second half 204 7,260 first half 153 55 7,864 second half 582 322 8,164 first half 745 422 9,236 755 498 second half forecast 3,500 3,000 2,500 2,000 1,500 1,000 500 0 06 07 08 09 10 Net Sales Ordinary Income Net Income 11
Assumed exchange rate / Exchange sensitivity 1 Assumed exchange rate (Unit : yen) 2009 2010 2010 2010 2010 result plan at the beginning of the period First half result second half projection projection USD 94 90 91 90 91 GBP 146 140 139 135 137 EURO 130 130 121 110 116 2 Impact on our full-year performance by a-yen appreciation Net Sales Operating Income (Unit : Million yen) USD - 30 + 21 GBP - 7-3 EURO - 13-10 12
. 2010 2QT Consolidated Financial Report. 2010 Prospects. Future Business Focus - Full entry into the high-end security market - Progress in LED lighting control system 13
1. Full entry into the high-end security market 14
1.High Security Market Applications Airport, Port, Government, Army, Plant, Power Plant, Border, Bank etc 15
1. Paradigm Shift: Growth Full entry into the high-end security market Market Positioning Highend RED SCAN Fiber Sensor 300 250 High-end security market will exhibit stable growth Demand will continue to increase due to concerns about terrorism and other risks at sensitive facilities Demand for fiber sensors accelerating; laser sensor demand growing rapidly High-End Security Market Trends/Forecast (Source: OPTEX CO., LTD. Research) (unit : US$ millions) Middle-end Low-end 200 150 Laser Sensor Fiber Sensor 100 Fence Sensor(except Fiber sensor Buried Sensor 50 Electric Field Sensor Active Infrared Beam Microwave 0 2008 2009 2010 2011 2012 2013 16
1.About Fiber Sensor Intrusion-detection sensor installed on fence or under ground detects fence flexion/vibration; identifies location in real time Climb Detection Cut Detection Vibration Detection [Features] Not affected by electrical or electromagnetic interference from lightning, high voltage lines, radar waves, etc. Can be tailored to facilities requiring explosion-proof specs Perfect for remote monitoring; easy installation. Fiber optics are resistant to salt corrosion along coastal areas; rated for 20-year+ life. [Principle] Pressure and Vibration Complex laser optic path; spot of light at the receiving terminal changes minutely. This change is processed into a signal for intrusion detection. 17
1. Accelerate business expansion Acquisition of Fiber SenSys [Company Overview] Name: Fiber SenSys, LLC Established: 1990 Capital: US$4.1 million Business Lines: Development, manufacturing and sales of optic fiber intrusion detection systems Address: 2925 NW Aloclek Drive, Ste. 130 Hillsboro, Oregon 97124, USA Employees: 23 [Objectives] 1, Acquire highly promising fiber sensor technologies and products for the high-end security market. Optic fiber intrusion detection systems Share by company Top Share in Fiber Sensor (FY2008) Worldwide scope US$28 million Others 60% (Source: OPTEX CO., LTD. Research) Fiber SenSys 40% 2, Expand sales of OPTEX products via newly expanded sales channels (mainly North America) in the high-end security market. 18
1. Fiber SenSys Operating Results/Forecasts Significant contributions to OPTEX Group growth in the growing high-end security market a 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Sales, profits strong pre-lehman Expected to be profitable this year (FY2010) Net Sales Operating Income (unit :1000US$) 0 (2,000) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (4,000) 19
2. Progress in LED Lighting Control System 20
2. Benefits of OPTEX LED Lighting Control System Outdoor light sensor control based on our skills and expertise in outside security sensors LED Lighting Sensors Control Box (1) Energy conservation No. 1 in the industry (2) Wireless network provides dual benefits (3) Products for any installation/environment (4) Easily customizable lighting control 21
2. Feature of LED lighting Control System (1) Energy conservation No. 1 in the industry Sensing technology and dimming technology conserves light, CO2, and electricity! Light at the right time, at the right brightness 400W mercury lamp No.1!! energy-saving effect Nearly 60% utility cost and CO2 output reduction! Replace 400 W mercury lamp with LED More! With Our Lighting Control System Up to 90 utility and CO2 savings!! 22
2. Feature of LED lighting Control System (2) Wireless network provides dual benefits Control multiple lights with one sensor No wiring construction reduces installation costs!! Multiple lights turn on simultaneously when sensing persons/objects!! wireless control wireless control Set lighting mode wirelessly by PC. 23
2. Feature of LED lighting Control System (2) Wireless network provides dual benefits Control multiple lights with one sensor No wiring construction reduces installation costs!! Multiple lights turn on simultaneously when sensing persons/objects!! Flash!! Flash!! Flash!! wireless control wireless control 24
2. Feature of LED lighting Control System (3) Products for any installation/environment Several hundred sensor configurations available to match any detection area/environment!! Outdoor use Sales Strategy / Targets Targeted applications Parks/Train Station Plazas/Parking Lots Coin-Operated Parking Car Washes Restaurant Chains, Convenience Store Chains etc. Indoor use 25
2. Feature of LED lighting Control System (4) Easily customizable lighting control Dimming function to easily customize lighting patterns GUI Design (patent pending) Energy Conservation + Convenience Smooth illumination for comfortable light Energy Conservation + Security Strobe effect for warning 10% brightness on stand-by 100% brightness when sensor is triggered 20% brightness 26
2. Case Study1 Ohsho Food Service at Takaragaike in Kyoto 27
2. Case Study2 Coin-Operated Parking 28
3. Consolidated Earnings Results and Full-Year Projections 29
3. Consolidated Earnings Results and Full-Year Projections (Unit : Million yen) 35,000 8,000 30,000 7,000 25,000 20,000 15,000 20,294 1,006 3,705 3,921 5,019 22,167 1,698 4,153 4,075 20,916 1,646 4,215 5,176 5,298 15,124 1,098 3,191 17,400 1,440 4,430 6,000 5,000 4,000 3,000 10,000 5,000 0 2,377 2,489 2,282 9,757 1,004 11,140 10,564 3,750 3,619 1,500 7,216 735 920 332 7,780 06 07 08 09 10(forecast) 11(forecast) 12(forecast) 13(forecast) 2,000 1,000 0 30
OPTEX CO.,LTD. *The data utilized in this presentation was based upon our assumption and estimated information. The actual business results might be different from the numbers we have shown you here because of various factors. 31