Presentation Q&A

Q: In Q1, Murata fell successful in terms of operating income while not achieve the net sales target. What caused this to happen?

A: Production surpassed sales. At the same time, the high earnings ratio can be explained by the net sales figure being lower than the quarterly target: a reduction in relatively unprofitable communication modules led to a better product mix.

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A: We haven’t revised our initial business forecasts. In Q2 we expect to achieve 336.0 billion yen in net sales assuming an exchange rate of $1=110 yen. The Q1 net sales, which fell short of the corresponding forecast, suffered from exchange effects as well as a lack of production materials for some of the smartphones in China. In July and after, we expect to resolve the lack of materials and launch new models in China, making it possible to reach the initially planned production.

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A: In Q1 we increased inventories by 2.0 billion yen. We plan to achieve the same production amount as net sales in Q2--assuming an exchange rate of $1=110 yen.

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A: In Q1 we used 95% of our 20-day operation month equipment capacity company-wide. In Q2 we expect to achieve 110% of that capacity. Capacitors used 90% of their 27-day operation month equipment capacity in Q1. In Q2 they will likely reach 95%.

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A: We feel that we pretty much have what we need in the field of communications. Going forward, we will also work on mergers and acquisitions in our three priority markets: automotive, healthcare, and energy. Such strategies underlie the new financial statements.

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A: First, we expect to increase the sale of Sony polymer batteries for use in smartphones and other mobile devices by taking advantage of the Murata sales network in the market for mobile products. We will also secure growth by developing applications for industrial power equipment such as power tools. At the same time, we will combine Murata’s energy management system with Sony secondary batteries to increase our ability to provide tailored solutions for individual customers. In the area of all-solid-state batteries, combining Sony’s material and design technologies with Murata’s layering technology will make mass-production possible at an early date.

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This Q&A contains forward-looking statements concerning Murata Manufacturing Co., Ltd. and its group companies' projections, plans, policies, strategies, schedules, and decisions. These forward-looking statements are not historical facts; rather, they represent the assumptions of the Murata Group (the "Group") based on information currently available and certain assumptions we deem as reasonable. Actual results may differ materially from expectations due to various risks and uncertainties. Readers are therefore requested not to rely on these forward-looking statements as the sole basis for evaluating the Group. The Company has no obligation to revise any of the forward-looking statements as a result of new information, future events or otherwise.

Risks and uncertainties that may affect actual results include, but are not limited to, the following:

1.economic conditions of the Company's business environment, and trends, supply-demand balance, and price fluctuations in the markets for electronic devices and components
2.price fluctuations and insufficient supply of raw materials
3.exchange rate fluctuations
4.the Group's ability to provide a stable supply of new products that are compatible with the rapid technical innovation of the electronic components market and to continue to design and develop products and services that satisfy customers
5.changes in the market value of the Group's financial assets
6.drastic legal, political, and social changes in the Group's business environment; and
7.other uncertainties and contingencies.

The Company undertakes no obligation to publicly update any forward-looking statements included in this Q&A.