1

Results for the year ended March 2016

Nihon Dempa Kogyo Co., Ltd

May 17th 2016 【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.

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Contents

1．Results for the year ended March 2016

2．Management policy & forecasts for the year ended March 2017

Results for the year ended Mar 2016

＜Net sales＞ Main reason of Mar 2016 sales decrease compared year to year ・Mainly for mobile communication, focused on profitability and did not respond to the request for price down, which led to lower market share. ・Production adjustment at mobile phone base station market in China. ・Slow down in Smart phone market.

＜Profit＞ Reason of profit reduction against forecast ・Delay with cost reduction activities at some ＡＶ/ＯＡ productions. ・Rapid development in yen appreciation in ４Ｑ. ・Evaluation loss in securities investment(342 million yen). ・As for net income, 272 million yen increased due to deferred tax assets increase at consolidated subsidiaries. 3

(Million yen） ① ② ③ ③－① ③－②

Mar 2015

annual

result

Mar 2016

annual forecast

Mar 2016

annual

result

Year to year

comparison

Comparison

to forecast

Net Sales 47,730 44,500 44,850 ▲ 2,880 350

Operating income 175 700 410 235 ▲ 290

Income before tax 359 600 102 ▲ 257 ▲ 498

Net income ▲ 569 500 317 886 ▲ 183

Total comprehensive income 1,319 － ▲1,414 ▲ 2,728 －

Exchange rate

(against the U.S. dollar) ¥ 110.03 ¥ 120.75 120.16¥ ¥ 10.13 ¥ ▲0.59

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Temporal factors (year ended Mar 2016) (\Mil.） ① ② ① ー ② ③ ④ ③ ー ④

Annual resultAnnual

result

47,730 0 47,730 44,850 0 44,850

175 311 ▲ 136 410 ▲ 372 782

359 653 ▲ 294 102 ▲ 581 683

▲ 569 ▲ 225 ▲ 344 317 ▲ 309 626

<Temporal factors included in profit>

Gain on fixed asset sales 278 156

Gain on land-use right sales 406 -

Gain on investment property sales 868 -

Impairment loss on fixed assets ▲ 1,149 -

Insurance income 646 195

Loss on valuation of inventories ▲ 738 ▲ 638

Repair expense of overseas factory - ▲ 85

◆Temporal factors in operating income 311 ▲ 372

342 ▲ 209

◆Temporal factors in income before tax 653 ▲ 581

Deferred tax assets ▲ 878 272

◆Temporal factors in net income ▲ 225 ▲ 309

Net sales

Operating income

Income before tax

Net income

Sales gain & revaluation loss on

securities investment

Exclude

temporal

factors

Mar-15 Mar-16

Temporal

factors

Exclude

temporal

factors

Temporal

factors

Decline insales price▲0.3bn¥

Decrease in sales volume

▲1.5bn¥

Mar 2016Operating

profit0.8bn¥

Mar2015Operating

profit▲0.1bn¥

Cost reductionof fixed cost

＋2.0bn¥

Exchange ratefluctuation＋0.5bn¥

Othercost reduction

＋0.2bn¥

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Profit variation analysis（Mar 2015→Mar 2016)

Income excluding temporal factors

＋0.3bn¥

Income excluding temporal factors

▲0.4bn¥

▲ 309

675

156

▲ 347

▲ 187

191

340

66

▲ 372

636

361

▲ 266

▲ 136

190

325

▲ 277

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Result of March 2015 Result of March 2016

Operating income Income before tax

Income（Million yen）

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・グラフ修正

In 4Q ending Mar 2016, sales and income decreased due to slow down in smart phone market and valuation loss on investment securities(¥342 mil) .

Quarterly results

11,751

12,675

11,97811,326 11,244 11,504 11,421

10,681

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Result of March 2015 Result of March 2016

Net sales（Million yen）

▲ 323

252

▲ 16 ▲ 49

118

276333

55

▲ 374

219

▲ 83▲ 57

104

247 278

54

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Result of March 2015 Result of March 2016

Operating income

Income before tax

Income excluding temporal factors (Million yen)

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・グラフ修正

Quarterly results（temporal factors excluded）

11,751

12,675

11,97811,326 11,244 11,504 11,421

10,681

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Result of March 2015 Result of March 2016

Net sales（Million yen）

1Q 2Q 3Q 4Q １Q ２Q ３Q 4Q

Result of March 2015 Result of March 2016

High industrial

1Q 2Q 3Q 4Q １Q ２Q 3Q 4Q

Result of March 2015 Result of March 2016

AV/OA & Optical

Optical

AV/OA

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Automotive ：Annual sales has increased due to robust demand at new applications such as ADAS（Advanced driver assistance system）.

High Industrial

：In 1Q of the year ended Mar 2016, production was adjusted at mobile phone base station market in China, but recovered from 2Q.

Mobile Communication

：Focused on profitability and did not respond to the request for price down which led to lower market share. Smart phone market slowed down in 4Q of the year ended Mar 2016.

AV/OA

：Sales mainly for TV, PC, home electronics and games dropped.

Sales trend at main applications ・グラフ修正（汚れ

0

1,000

2,000

3,000

4,000

5,000

1Q 2Q 3Q 4Q １Q ２Q ３Q 4Q

FY2015 FY2016

（¥mil.） Automotive

0

1,000

2,000

3,000

4,000

5,000

1Q 2Q 3Q 4Q １Q ２Q ３Q 4Q

Result of March 2015 Result of March 2016

（¥mil.） Automotive

1Q 2Q 3Q 4Q １Q ２Q ３Q 4Q

Result of March 2015 Result of March 2016

Mobile

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Content

1．Results for the year ended March 2016

2．Management policy & forecast for the year ended March 2017

0

10,000

20,000

30,000

40,000

50,000

60,000

Mar 2015results

Mar 2016results

Mar 2017forecast

Mar 2018target

Mar 2019target

（¥mil.）

Sales composition

Mass production(Mobilecommunication +AV/OA)

SAW

Sensor & others

High industrial

Automotive

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Mid-term sales plan

■General mass produced productions（Mobile communication,

AV/OA）, SAW（Especially for mobile communication）

⇒Change direction from shrinkage to growth

■High industrial, Automotive, Sensor

⇒Generate stable profits with competitive products with high

quality and strong technology Make a revival to

50bn yen company

・グラフ修正

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Mobile communication market environment

Increasing demands to SAW devices

Diversification in communication system and emergence of new

frequency range

Increasing TCXO demands mounted in smart phones

・グラフ修正 LTE development and increase in

demand for highly accurate GPS

0

20,000

40,000

60,000

80,000

2013 2014 2015 2016 2017 2018 2019

（Mil. units）

Source：NAVIAN

SAW market

CY2015： 28.7 bn units

¥425.5 bn

↓

CY2018： 48.6 bn units

¥603.3 bn

0

500

1,000

1,500

2,000

Mar 2014 Mar 2015 Mar 2016 Mar 2017 Mar 2018 Mar 2019

（Mil. units） TCXO demand

Source：NDK estimation

0

5,000

10,000

15,000

Mar 2015results

Mar 2016results

Mar 2017forecast

Mar 2018target

Mar 2019target

（￥Mil.）

Mobile Communicationsales

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Mobile communication

○Refocus on TCXO market ⇒Increase sales of ultra small sized products and low cost products

Ultra small sized product 1612 size

・グラフ修正

0

5,000

10,000

Mar 2015results

Mar 2016results

Mar 2017forecast

Mar 2018target

Mar 2019target

（¥Mil.）

SAW sales

SAW automobile SAW base station SAW mobile

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＜Automotive＞ 〇We target to start business with SAW devices at automotive market. NDK has competitive edge on quality system in this area that has been established through long term experience of crystal unit production. ＜High industrial＞ ○Keep No.1 share for base station use.

SAW devices

＜Mobile communication＞ ○Start business with leading module maker ○Increase sales to Taiwan/China market where supply is tight

Start mass production on a full scale from

this term

We target to enter into 1 band per year

High end smart phones mount

30 units of SAW devices

・グラフ修正

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【Capital investment】Plan 5 billion yen in the year ended Mar 2017

mainly to increase TCXO and SAW capacity

Capital investment

Approx. 70% are invested to increase TCXO and SAW capacity

(¥Mil.)

5,699

2,631

2,107

1,709

5,000

3,425

3,923 3,8093,558

3,959

Mar-13 Mar-14 Mar-15 Mar-16 Mar-17

Capital investment Depreciation

0

4,000

8,000

Mar 2015results

Mar 2016results

Mar 2017forecast

Mar 2018target

Mar 2019target

（¥Mil.）AVOA sales

AVOA（Original）

AVOA（New products for IoT)

0

4,000

8,000

Mar 2015results

Mar 2016results

Mar 2017forecast

Mar 2018target

Mar 2019target

（¥Mil.）Optical sales

Movies, broadcast use, etc

Single-lens reflex use

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AV/OA, Optical ・グラフ修正

＜AV/OA＞

No. of devices that are connected to IoT will increase and demand of crystal which has communication function will increase accordingly.

Develop and expand sales of standardized products for IoT that has price competitiveness.

Design activities for

new communication

system have been

carried out actively

for chipset makers

＜Optical＞ ○Scale down products for low price

single-lens reflex camera ○ Expand sales of cameras for movies

and broadcasting use with incidence angle improvement coating technology

○Develop super low phase noise oscillators and

provide high reliability products in space, defence, and social infrastracture market. ⇒Apply phase noise reduction technology that has been developed for audio equipment.

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High industrial ・グラフ修正

0

2,000

4,000

6,000

8,000

Mar 2015results

Mar 2016results

Mar 2017forecast

Mar 2018target

Mar 2019target

（¥Mil.）

High industrial sales

MVCXO・High frequency wave XO Small, high precision OCXO

Develop and expand sales of high value-added industrial products

〇The speed increased to 100Gbps, 400Gbps in the

optical communication market, where higher frequency is required for oscillators. ⇒Promote development and sales expansion of new product MVCXO（Multi Function VCXO）and

high frequency XO. ○Installation of compact base stations and spot

base stations increased in order to process mass radio wave. ⇒Promote development and sales expansion of compact and high accuracy OCXO.

Due to the increase of traffic, the

demand of mobile phone base

station and optical communication

equipment, are expanding

0

5,000

10,000

15,000

20,000

Mar 2015results

Mar 2016results

Mar 2017forecast

Mar 2018target

Mar 2019target

（¥Mil.）

Automotive sales

Total sales of TCXO,ICXO,SAW

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Automotive market

〇Respond to increasing demand for ADAS Strengthen development and sales with highly reliable automotive products (TCXO, ICXO, SAW）

Increasing demand

to TCXO, ICXO, and SAW

Increase in demands for crystal

devices used at cameras and

radars mounted on automotive

for ADAS（Advanced Driver

Assistance System) use.

・グラフ修正

Crystalunit

TCXO ICXO SAW

Safety ABS/ESC ○Engine Control ○Transmission ○

Image Millimeter-wave radar ○ ○ ○Car-mounted camera ○ ○

Information Telematics ○ ○ ○Car audio ○ ○

Car navigation(GPS) ○ ○ ○ ○Communication RKE (2 way) ○ ○

TPMS(2 way) ○ ○WiFi/Bluetooth ○ ○ ○

Body Meter, Dashboard ○

ＡＤＡＳ

18

Sensor

・グラフ修正

0

1,000

2,000

Mar 2015results

Mar 2016results

Mar 2017forecast

Mar 2018target

Mar 2019target

（¥Mil.）

Senor sales

Ultrasonic devices QCM sensor

＜Sensor Market＞ ○Sale of QCM Sensor Make efforts to commoditize products for food inspection. The production and sales will be collaborated with the partner client of this product.

＜Ultrasonic Equipment＞ 〇Develop and sell Portable Simplified Ultrasonic Wave Sensors looking forward to demand increase in medical and nurse care.

Develop and sell products that contribute to comfortable life with health, safe and security

The ultrasonic wave image is displayed by connecting USB to tablet

In order to widely spread the

use of this sensor, NDK

produced “compact” and

“portable” mobile devices

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Forecast for the year ended March 2017

＜Reference＞ - Influence on net sales (Annual) ¥1 fluctuation ⇒ approx.¥200 million - Influence on operating income (Annual) ¥1 fluctuation ⇒ approx.¥50 million

(\ Mil.)

Mar-16 Mar-17

result forecast

Net sales 44,850 45,000

Operating income 410 850

Income before tax 102 750

Net income 317 650

Income before tax ratio 0.2% 1.7%

¥120.16 ¥110.00Exchange rate（against the U.S. dollar）

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Enquiry on IR

Corporate Planning Office, Nippon Dempa Kogyo. Co., Ltd.

Mail: irmaster@ndk.com

We aim to raise corporate value by satisfying our customers through delivery of high-reliable and high quality products required by customers when in need at a reasonable price. We appreciate your continued support . Thank you for your kind attention.