CORPORATE INFORMATION CORPORATE INFORMATION Interim Period Ended Interim Period Ended September 3, 23 September 3, 2323 -November 23- Meitec Corporation 8-5-26 Akasaka, Akasaka DS Building Minato-ku ku,, Tokyo 7-52 52 TEL 3-543 543-26 FAX 3-543 543-262 URL : http://www.meitec meitec.co..co.jp
Overview of Interim Period Ended September 3, 23 Although business conditions overall showed no improvement, energetic structural reforms and resumed and expanded R&D investment by client companies resulted in an increase in orders received. The solid performance in the automobile-related and electronics-related related sectors (particularly digital still and video cameras, televisions, ions, DVD players, liquid crystal displays, and plasma display panels) that began in the previous fiscal year continued in the period under review. Also from the beginning of current fiscal year, the semiconductor design sector (including system LSIs for communications, image processing, and digital components) and the industrial machinery sector (including industrial plant and equipment, automotive products, and digital components) also posted rising orders. As a result of these market trends, the Meitec Group largely achieved its performance forecasts for the first half of fiscal 24. Current market trends: As far as can be seen from our utilization n ratio and total utilization in October (the first month of the second half), and from trends in new orders received, it appears that the Company s s solid performance will continue. *We are unable to discern any effects from the recent rise in i n the value of the yen. Formulating strategies for fiscal 25 will be an issue for the Meitec Group during the second half. Results : Interim Period Ended September 3, 23 <Consolidated> Net Sales Operating Ordinary Net 24 34,747 5,96 5,92 3,36 34,2 5,6 5,6 3,.6% 5.5% 5.7%.5% 23 3,888 4,79 4,98 2,234 Change(%) 9.% 4.3% 4.% 48.4% Initial Forecast 34,2 Interim v.s.initial Forecast Period.6% 24 7, 2, 2, 6,6 Fiscal Year 23 65,737 9,48 9,79 5,472 Change(%) 6.5% 3.2% 3.7% 2.6% 2
Results : Interim Period Ended September 3, 23 <Consolidated> 35 2% 32 33 38 347 7.2% 6.5% 7.% 3 28 7.% 7.% 3.6% 6.2% 3.2% 5% 25 2 5 5 2.9% 3.% 9.5% 8.% 7.5% 9.5% % 7.% 59 54 5% 53 59 36 54 54 4 38 4 2 25 3 22 33 % 999/9 2/9 2/9 22/9 23/9 Net Sales Operating Ordinary Net Operating Margins Ordinary Profit Margins Net Margins 3 Results : Interim Period Ended September 3, 23 <Non-Consolidated> Net Sales Operating Ordinary Net 24 29,4 5,22 5,432 3,5 28,5 5, 5,3 2,8.8% 2.2% 2.5%.3% 23 26,9 3,73 3,94 2,59 Change(%) 7.8% 39.7% 37.8% 44.3% Initial Forecast 28,5 Interim v.s.initial Forecast Period.8% 24 58,5,7,9 6, Fiscal Year 23 55,379 8,27 8,248 5,7 Change(%) 5.6% 33.3% 32.% 9.6% 4
Results : Interim Period Ended September 3, 23 <Non-Consolidated> 3 27 283 29 25% 262 269 248 25 236 8.7% 8.% 8.% 8.7% 2% 7.3% 8.% 2 86 8.2% 7.2% 7.7% 4.7% 4.% 6.2% 5% 4.8% 5.2% 3.9%.6% 8.9%.7%.6% 8.% 8.2% 8.% % 5.9% 49 5 4.2% 43 45 5 37 52 54 4 43 5 5 35 2 37 3 39 5% 3 2 9 6 2 24 2 8 % 996/9 997/9 998/9 999/9 2/9 2/9 22/9 23/9 Net Sales Operating Ordinary Net Operating Margins Ordinary Profit Margins Net Margins 5 Key Factor in Operation <Non-Consolidated> Interim Period ended September 3, 23. Engineer s s Operating Ratio (average average for the st half of fiscal year) Average engineer s s operating ratio for the st half of fiscal year was 95.7%. This was slightly less than forecasted 94.9%. * By the end of September 23,, the ratio improved to 98.4% from 92.5% at the end of April 23. 2. Operating Hours (average for the st half of fiscal year) Average operating hours for the st half of fiscal year was 9.3 hours per day where it was 9. hours per day for the same period of the previous fiscal year. *Average for the second half of the previous fiscal year was 9.8 hours per day. 3. Rate Revision Price per hour was improved for.3% compared to the previous fiscal year. 6
Key Factor in Operation <Group < Companies> Interim Period ended September 3, 23 <Japan Outsourcing>. Engineer s s Operating Ratio; Average engineer s s utilization ratio for the st half of fiscal year was 95.3%. This was slightly less than forecasted 93.2%. 2. Operating Hours; Average operating hours for the fiscal year was 9.5 hours per day. Above the forecasted 9.3 3hours per day. 3. Rate Revision; Price per hour was improved for.8% compared to the previous fiscal year. <Japan Cast>. The Operating margin improved to 5.6% from 4.% of same period of o f previous year. <3D tech> The 3D tec achieved profit for the interim period for first time. <IMS IMS> Complete reformation of the company. 7 Consolidated Operating Results Interim period Ended September 3, 23 Net Sales Operating Ordinary Net Meitec 29,4 5,22 5,432 3,5 Japan Outsourcing 4,262 59 593 342 Japan Cast,373 77 77 44 Interim Period 3D Tec IMS 5 Meitec Global Solutions Solutions 7-5 -5-3 MeiService 7 9 9 6 Consolidated 34,747 5,96 5,92 3,36 8
Growth in Group Revenue Interim Period Ended September 3, 23 Meitec 83.8% JO+JC JC+3D 3DT +IMS IMS+MS 6.2% Interim Period 22 Meitec 82.8% JO+JC JC+3D 3DT+ IMS+MGS MGS+MS MS 7.2% Interim Period 23 Interim period 22 Interim Period 23 change Change(%) Meitec 269. 29. 2. 7.8% JO+ JC + 3DT + IMS+ MGS+ MS 5.8 5.8 6. 8.3 6.3% Consolidated Net Sales 32.9 35.2 3.4 9.8% Ratio of (JO+ JC+ 3DT+IMS+ MG S+ MS) to Consolidated Net Sales 6.2% Amounts are non-consolidated basis 6.2% 7.2%.point - 9 Non-Consolidated SG&A Expenses and Cost of Sales, and Their Ratio to the Sales 35 3 25 2 82.% 82.7% 85.9% 262 236 248 7.3% 66.2% 63.6% 45 35 43 29 283 86.2% 27 8.8% 82.3% 82.% 269 5 69.9% 73.7% 52 49 68.5% 37 69.4% % 8% 6% 5 5 73 5 77 86 97 98 2 4% 8.4% 6.4% 4.6% 3.4% 2.4% 2.6% 2.5% 2% 43 43 36 36 35 33 36 % 997/9 998/9 999/9 2/9 2/9 22/9 23/9 SG&A Expenses Cost of Sales Operating SG&A Expenses to Net Sales Cost of Sales to Net Sales Cost of Sales+SG&A Expenses to Net Sales
Consolidated SG&A Expenses and Cost of Sales, and Their Ratio to the Sales 4 35 3 25 87.% 28 72.4% 36 69.5% 82.9% 33 83.8% 86.9% 32 54 7.3% 54 38 59 4 74.5% 347 83.% 7.5% % 8% 6% 2 5 24 27 235 237 244 4% 5 4.7% 3.4% 2.5% 2.4% 2.5% 4 42 4 39 43 999/9 2/9 2/9 22/9 22/9 SG&A Expenses Cost of Sales Operating SG&A Expenses to Net Sales Cost of Sales to Net Sales Cost of Sales+SG&A Expenses to Net Sales 2% % Operating Ratio <Non-Consolidated> % 99.25% 99.4% 95% 95.87% 95.57% 93.72% 9.7% 9% 96.78% 95.58% 93.85% 94.7% 9.47% 95.89% 94.65% 95.34% 92.45% 94.57% 95.66% 93.5% 93.64% 85% 88.66% 88.65% 86.66% 8% 75% Restructuring Restructuring periods periods by customers Crisis in the Japanese by customers Financial System IT Recession Interim Period Ended Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended September March 3,999 March 3,2 March 3,2 March 3,22 March 3,23 3,23 4 7 4 7 4 7 4 7 4 7 4 7 Quarter Period Average Operating Ratio,excluding new employees Companywide Operating Ratio 2
Hours of Operations <Non-Consolidated> 9.8 9.6 Average Hours of Operations Hours of Operations Polynomial Expression(Hours of Operations) Hours of Operations(h/day 9.4 9.2 9. 8.8 8.6 8.4 Average : Average :9.5 9.5H Average :9.6 9.6H Average :9.23 9.23H Average :9. 9.H Average :9.8 9.8H 9.3H Interim 8.2 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Period Ended Ended March Ended March Ended March Ended March Ended March September 8. 3,999 3,2 3,2 3,22 3,23 3,23 998/4 999/4 2/4 2/4 22/4 23/4 3 Trend of New Orders by Month <Non-Consolidated> ( Number of New Orders) 45 New Orders 4 Compared with the same month of the previous year 35 3 25 2 5 5 45 4 35 3 25 Compared with the same month in 2 the previous year (%) 5 5 4 5 6 7 8 9 2 2 2 3 4 5 6 7 8 9 2 2 2 3 4 5 6 7 8 9 2 2 2 3 4 5 6 7 8 9 2 2 2 3 4 5 6 7 8 9 99 2 3 4
Sales Comparison by Segments <Non-Consolidated> 997/9 998/9 999/9 2/9 2/9 22/9 23/9 ( Million Yen) Automobile/Transportaion Aircraft/Aerospace Industrial Mchinery Precision Equipment IT Related Hardware and Devices Electric and Electronics Semiconductor and Integrated Circuits Design Semiconductor Equipment and Devices Information Processing/Software Plant Construction Other Sales Comparison by Segments <Non-Consolidated> Segment Interim 2 interim 2 Net Sales Interim 22 Net Sales Total Net Sales(%) Interim 23 Change Change (%) Automobile/Transportation 4,544 5,246 5,858 6,59 22.7% +733 +2.5% Aircraft/Aerospace,737,638,75,64 5.7% -63-3.7% Industrial Machinery 3,28 2,679 2,52 2,674 9.2% +72 +6.9% Precision Equipment,48,86,8,74 4.% +93 +8.6% IT Related Hardware and Devices 3,43 3,44 2,85 2,76 9.3% -44-5.% Electric and Electronics 2,798 3,323 3,599 3,98 3.7% +38 +.6% Semiconductors and Integrated Circuits Design 4,274 4,784 4,6 4,968 7.% +87 +9.4% Semiconductor Equipment and Devices 2,58 2,478,667,674 5.8% +7 +.5% Information Processing/Software 2,4,683,88,88 6.5% + +.% Plant 695 649 52 562.9% +42 +8.2% Construction 276 28 87 6.6% -27-4.5% Other 8 956 886 987 3.5% + +.5% Total 27,43 28,25 26,9 29,4.% +22 +7.8% Yellow ;Up compared to previous year 6
New Contracts<Non-consolidated> consolidated> Existing Engineers and Recent Graduates (Segment) New Contracts by Segments (Apr,,23, to Sep,3,23) Automobile/Transportation Aircraft/Rocketry Industrial Machinery 26 44 3 7 38 23 36 3 2 72 22 3 4 2 94 Precision Equipment 36 22 69 IT-Related Hardware and Devices 9 37 66 Electric and Electronic Semiconductors and Integrated Circuits Design 45 97 3 7 6 2 23 33 4 96 Semiconductor Equipment and Devices 7 25 3 Information Processing/Software Development and Management 59 2 Plant 2 6 Construction 2 2 Other Materials 3 3 3 Other 7 2 6 9 4 4 6 62 (Number of Cortracts) 5 5 2 25 Machinery Electric and Electronic Control Systems Information Systems chemistry Other 7 New Contracts<Non-consolidated> consolidated> Existing Engineers and Recent Graduates New Contracts by Segments (Apr,,23, to Sep,3,23) (Segment) Automobile/Transportation Aircraft/Rocketry Industrial Machinery Precision Equipment 6 5 2 2 2 9 6 5 6 54 4 5 2 3 78 7 IT-Related Hardware and Devices 2 4 3 2 2 Electric and Electronic Semiconductors and Integrated Circuits Design 9 46 4 5 3 63 3 66 Semiconductor Equipment and Devices Information Processing/Software Development and Management 2 2 2 5 4 2 4 33 Plant 2 2 Construction ( 契 約 数 ) Other Materials 6 7 Other 3 6 2 3 4 5 6 7 8 9 Machinery Electric and Electronic Control Systems Information Systems chemistry 8
Top Clients by Sales and Share of Net Sales <Non-Consolidated> <Five Five Years Ago> <Current> Interim Period Ended Sep. 3,999 Interim Period Ended Sep. 3,22 Interim Period Ended Sep. 3,23 Company Name Sales % Company Name Sales % Company Name Sales % Seiko Epson,42 5.4% Matsushita Electric,939 7.2% Matsushita Electric 2,286 7.9% 2 Mitsubishi Heavy,264 4.8% 2 Sony Corp.,834 6.8% 2 Sony Corp. 2,242 7.7% 3 Sony Corp.,26 4.6% 3 Seiko Epson,6 3.9% 3 Toyota Motor,37 3.6% 4 Matsushita Electric 749 2.9% 4 Mitsubishi Heavy 986 3.7% 4 Mitsubishi Heavy 936 3.2% 5 hitachi Ltd 66 2.5% 5 Toyota Motor 899 3.3% 5 Canon Inc. 92 3.% 6 Omron Corp. 622 2.4% 6 Canon Inc. 877 3.3% 6 Seiko Epson 867 3.% 7 Canon Inc. 593 2.3% 7 Jatoco T.T. 586 2.2% 7 Nikon Corp. 674 2.3% 8 Kawasaki Heavy 5 2.% 8 Nikon Corp. 539 2.% 8 Omron Corp. 639 2.2% 9 Oki Electric 455.7% 9 Kawasaki Heavy 57.9% 9 Jatoco T.T. 64 2.% Nikon Corp. 43.6% Omron Corp. 492.8% Sony EMCS 56.9% Top Total 7,96 3.2% Top Total 9,733 36.2% Top Total,76 37.% Top 2 Total,696 4.9% Top 2 Total 2,769 47.5% Top 2 Total 4,49 48.8% Others 4,22 53.9% Others 4,32 52.5% Others 4,855 5.2% Total 26,82.% Total 26,9.% Total 29,4.% ;up compared to previous year 9 Progress in Strategic Rotation Strategic Rotation:< Planned Cases=983> Achieved improvement in job phase and rotation to other clients. 25 2 25 Number of rotation in a fiscal year Cumulative numbers of ration done 228 983 2 Cases 5 5 6 755 8 58 643 499 2 6 42 82 78 62 4 46 26 2 46 (Planned) ~2/9 ~2/3 ~2/9 ~22/3 ~22/9 ~23/3 ~23/9 23/~ 2
Most Important Measures of The Global Vision 2. Efficient job assignment to the engineers with the Best Matching System. At the interim period, the utilization ratio was 95.7%, up.3 percentage point 2. Expansion of the services provided by the entire group to fulfill the needs for the full line up outsourcing. Increased revenues and earnings at Japan Outsourcing Inc. and Japan Cast Inc. 3D Tec Inc. and Information Management System Co., Ltd. (IMS) climbing into the black. 3. Promote the cost reduced services by applying the Chinese resources. Established Meitec Global Solutions Inc. in April 23, and Meitec (Shanghai) in October 4. Promote the out placement businesses & outsourcing Commence promotional seminars from November 2 Orders Received by Results of Group Coordination in Sales Effort <Number of Orders>:April 23 - September, 23 Responded by MEITEC JO JC 3DT IMS MGS Total Interim period of previou s year MEITEC 245 97 7 5 474 24 JO 9 74 84 48 JC 7 28 35 3 3DT IMS MGS 6 6 - Total 22 38 39 98 7 5 599 Interim period of previou s year 2 86 34 56 23-32 22
Interim Period Fiscal Year Projections by Company: Fiscal Year Ending March 3, 24 Net Sales Operating Ordinary Net Meitec 29,4 5,22 5,432 3,5 Japan Outsourcing 4,262 59 593 342 Japan Cast,373 77 77 44 MeiService 3D Tec 5 IMS 7-5 -5-3 Meitec Global Solitions 7 9 9 6 Consolidated 34,747 5,96 5,92 3,36 Meitec 58,5,7,9 6, Japan Outsourcing 8,5,2,2 65 Japan Cast 2,8 5 5 85 MeiService 26 5 3D Tec 3 5 IMS 4 2 2 Meitec Global Solitions 2 5 5 8 Consolidated 7, 2, 2, 6,6 23 Presuppositions for the Performance Projections <Non-consolidated> For the fiscal year ending March 3, 24. Operating Ratio (Average) First Half : 95.7% Second Half : 98.% Fiscal Year : 97.2% 2.. Assignment of New Graduate Completion by end of September 3.. Hours of Operation 9.3h/Day Day(whole year) 9.32h/Day Day(End half Average) 4.. Rate Revision.3% up(up on completion) 5.. Mid-career hiring during the fiscal year : 3 persons/previous plan for end half of year 5 persons +α/new target for end half 24
Plans for Fiscal 25 (year ending March 3, 25). Expansion of workforces at Meitec and Japan Outsourcing Goal: Increase the combined workforce of Meitec and Japan Outsourcing to more than 7,4 by April, 24 (from 7, as of April, 23) Methods: Mid-career recruiting, O&O activities, etc 2. Expand earnings in business other than temporary staffing Target: 3 3 billion (Projected combined earnings of 3D Tec, IMS, Meitec Global Solutions and MeiService for the fiscal year ending March 3, 24: 9 million) 25 - to achieve Strategic Expansion of Group Operation Engineering Engineering - to achieve billion sales for entire MEITEC Group O&O - billion sales for entire MEITEC Group - Enterprise Meitec JO GV2 3D tec IMS Other alliance company MGS Meitec JO Non- temporary staffing Non- temporary staffing JC temporary staffing JC temporary staffing <999> <23> Non-engineering Non-engineering 26
Change to Dividend Policy From the first half of fiscal 24 (the six months ended September 3, 23) onward, the payout ratio for interim dividends will be 3% of consolidated net income. For the fiscal year ending March 3, 24, the Company anticipates to declare a fiscal year-end dividend to Commemorate Meitec s 3th anniversary. 27