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Result of Operations for Fiscal Year 2019

(Ended March 31, 2019)

Nihon Dempa Kogyo Co., Ltd.

May 17, 2019 【Note】 Statements made in this presentation with respect to our current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about our future performance. These statements are based on management's assumptions and beliefs in light of information currently available to it. We caution that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore you should not place undue reliance on them. You also should not rely on the belief that it is our obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Risks and uncertainties that might affect us include, but are not limited to, fluctuation of currency exchange rates, overall supply and customer demand in the industry, product development and production capacities, performance of affiliated companies, and other risks and uncertainties.

１．Results for FY2019 ２．Initiatives for Growth ３．Outlook for FY2020

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＜Contents＞

Presented by Hiromi Katoh,

Representative Director and President

① ② ③ ④＝②＋③ ④－①

FY2018 Full Year

（exclude temporal factors）

FY2019 Full Year

Outlook as of May 11

FY2019 Full Year Result

Temporal Factors

FY2019 Full Year Result

（exclude temporal factors）

Change from Outlook as of

May 11 （exclude temporal factors）

Net Sales 43,952 44,500 42,498 0 42,498 ▲2,002 Operating Income/ Loss ▲1,347 500 406 ▲1,455 ▲1,049 ▲1,549

Income/ Loss before Tax ▲1,369 300 ▲56 ▲1,455 ▲1,511 ▲1,811

Net Income/ Loss ▲1,586 200 ▲251 ▲1,455 ▲1,706 ▲1,906

Exchange Rate (against U.S. dollar)

¥110.81 ¥105.00 ¥110.69 - - -

Summary of Performance in FY2019

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（Million yen）

＜Temporal factors included in profit/ loss＞ FY2018 FY2019

Impairment losses 6,515 397

Inventory valuation losses/ disposal losses 1,050

Legal settlement expenses 706

Gain on sales of land use rights and building of subsidiary in China ▲1,852

◆Temporal factors in Operating Income/ Loss 8,271 ▲1,455

Reversal of deferred tax assets etc. 345

◆Temporal factors in Net Income/ Loss 8,616

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Results for FY2019 : Net Sales

Mobile Communications and IoT Comparison to outlook: ▲¥0.8 billion

Automotive Comparison to outlook: ▲¥1.0 billion

Mobile Communications YoY comparison : ▲¥1.3 billion

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Results for FY2019 : Profit

Quarterly Results for FY2019

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*2

*1 Temporal factors are excluded

*1

FY2018 4Q FY2019 4Q

*1 Temporal factors are excluded

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Results for FY2020 : Sales Trends in Main Applications

１．Results for FY2019 ２．Initiatives for Growth ３．Outlook for FY2020

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＜Contents＞

Presented by Hiromi Katoh,

Representative Director and President

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Initiatives for Growth （5G Will Take Off Soon）

Source ：NDK Source ：TSR

Full-scale ５G-System operations will start in FY2021

Base Stations

Smartphones

IoT

ADAS

Autonomous-

driving

５G

Business opportunities for NDK

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５G System Significant increase in the amount of information

carried in radio waves

Q

I I I

64QAM 256QAM 1024QAM

I

Q Q Q

【4G】 【 5G_Phase1 ／ 4G_Advance】

【 5G_Phase2 ／ IEEE802.11ax】

Initiatives for Growth （Requirement Level Rises）

NDK will respond to the rising requirement level

with all its technological strength

When the code

(information)

gets nearer

Becomes

sensitive due to

noise

●In response to needs for low noise and

high frequency crystal units,

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Initiatives for Growth （Integrated Production of Crystals Devices）

High quality synthetic

quartz crystal Plane-parallel

wafer

Microfabrication

technology

Ultra-miniature

crystal units

5G system requires higher frequency

Manufacture “high quality

synthetic quartz crystal” in-house

NDK’s integrated production system from high quality gemstones to crystal oscillators offers significant advantages for 5G systems !

Make the best use of

“photolithographic technology”

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Initiatives for Growth（Products for 5G）

Differential Output Oscillator

Clear superiority over the performance of MEMS oscillators

Low g Oscillator

NT2016S NT3225S

（*１）

(*1)

Vibration Sensitivity:

Amount of frequency change per 1G

(acceleration of gravity).

The smaller the figure is, the influence

of the vibration reduce.

MEMS Oscillator

Crystal Oscillator

Small Cell Station

Macro Base

Station

Core Network

Distributer Unit 5G-RRU

Distributer Unit 5G-RRU

Backhaul

Center Unit

Fronthaul

Optical Fiber

Initiatives for Growth （5G Base Stations）

Volume of small cells will increase

Usage for 5G will grow from 2020

Begins to be introduced in cities in Japan, South

Korea, US and China

Small Cell Station

Macro Base

Station

Core Network

Distributer Unit 5G-RRU

Distributer Unit 5G-RRU

Backhaul

Center Unit

Fronthaul

Initiatives for Growth （Products for 5G Base Stations）

【DU】 Low noise/high quality oscillators /high temperature

◆High quality TCXO（100ppb/95℃） -

Demand for smaller and higher quality oscillators ◆9×7mmOCXO

【Macro/Small Cell ・ＣＵ】 Reference clock : High quality oscillators Holdover：±1.5μsec

◆25×22mm OCXO

Optical Fiber

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Initiatives for Growth （5G Smartphones, IoT）

Logistic tracker

Blood Glucose Level Monitor Measure blood glucose in real time for 24 hours

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Needs for security are increasing such as anti relay attack

Initiatives for Growth（Automotive）

TPMS Keyless system/ Smart key

Camera

Rader

LiDAR

GPS

Autonomous driving

V2X

Applications for crystals will expand

① ②

③ ④

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Synthesizers Outgas Sensors

Developed jointly with JAXA for space applications ⇒ Resin/ solvent manufacturers

Ultrasonic

Medical Care Nursing

Initiatives for Growth （Synthesizers, Sensors）

Down Converter

For special applications and satellite station

For inspection of automotive radar

■Sayama⇒Factories in Japan

Sayama⇒Hakodate（Small mass-production products）

Sayama⇒Furukawa（Crystal oscillators for industrial use）

Sayama⇒Niigata（Crystal filters）

■Factories in Japan⇒Factories abroad

Furukawa⇒Malaysia

（Tuning fork type crystal units）

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Initiatives for Growth （Restructure of Production System）

Malaysia

Japan

１．Results for FY2019 ２．Initiatives for Growth ３．Outlook for FY2020

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＜Contents＞

Presented by Hiromi Katoh,

Representative Director and President

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Outlook for FY2020 : Net Sales

+0.6 billion

▲0.8 billion

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Outlook for FY2020 : Profit

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Outlook for FY2020 : Full Year

Million Yen FY2019 Full Year Results

FY2020 Full Year Outlook

FY2020 1st half Outlook

FY2020 2nd half Outlook

Net Sales 42,498 42,500 20,300 22,200

Operating Income/ Loss

406 600 ▲500 1,100

Income/ Loss before Tax

▲56 200 ▲650 850

Net Income/ Loss

▲251 100 ▲700 800

Exchange Rate (against U.S. dollar)

110.69 107.00 107.00 107.00

Capital Investment : FY2019(Actual) ¥2,376million⇒FY2020(Outlook) ¥1,700million

R&D Expenses : FY2019(Actual) ¥1,884million⇒FY2020(Outlook) ¥1,800million

＜Reference＞

Influence on Net Sales (annual): ¥1 fluctuation⇒approx. ¥200 million

Influence on Operating Income (annual):¥1 fluctuation⇒approx. ¥50 million

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Target for Medium-Term

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For investor relations related inquiries, please contact:

Corporate Planning Group

Nihon Dempa Kogyo Co., Ltd. E-mail: irmaster@ndk.com

We look forward to your continuing support in the years ahead.

Thank you