Financial Overview

(in millions JPY)

	FY2010	FY2009	Rate of Change (%)	Factors
Overall
Sales	550,668	493,639	11.6	-
Operating income	28,871	4,742	508.8	-
Ordinary income	23,174	1,676	1282.7	-
Comprehensive income	6,174	-	-	-
Net income	11,136	570	1853.7	-
Electronic Components
Sales	303,674	281,252	8.0	-
Operating income	12,966	395	3182.5	-

Business Overview

Electronic Component Division
Sales of electronic parts for digital equipment increased supported by growing demand for the products especially in the emerging markets. Sales also remained strong in the area of electric devices and navigation systems, as vehicle production has stabilized in many countries. Overall sales at the Electronic Component Division climbed year-on-year, as the Company conducted active marketing efforts to sell new products, while aiming to realign its product array in the medium-and long-term perspective.

Automotive Division
Vehicle sales decreased in Europe following the termination of governments' sales incentive programs. In Japan, the U.S., and emerging countries as China and India, however, sales were generally on the increase. As such, the Company, which has a strong presence in the high-end vehicle market, also enjoyed growing demand for electric devices and components used in medium and compact vehicles. Automotive product sales for FY2010 were 124.9 billion yen, up 11 percent from the previous year's result.

Recent Developments in Japan

-The Company announced on March 31 that it will spin off its power conversion and control system business relating to green devices, and transfer the operation to a new company, which will be called Alps Green Devices Co., Ltd. The new company will absorb Alps Electric's existing product lines of inductors in power supplies, reactors for automobiles and industrial equipment, and electric current sensors for smart meters and automotive instruments. Sales at the new company are expected to reach 23 billion yen by 2015. (From an article in the Nikkan Jidosha Shimbun on April. 1, 2010)

Outlook for FY2010

(in billions of JPY)

	FY2011 (forecast)	FY2010	Year-on-year Fluctuation
Sales	540.0	550.6	(0.6)
-Electronic Components	300.0	303.6	(3.6)
Operating income	24.0	28.8	(4.8)
Ordinary income	22.0	23.1	(1.1)
Net income	12.0	11.1	0.9

Financial Targets based on the 6th Mid-term Management Strategy

Electronic Components

(in billions of JPY)

	FY2011	FY2010	FY2009
Sales	Over 330	Over 300	286.0
Operating income	Over 30	Over 20	14.0
R&D Expenditure	Approx. 12	Approx. 12	12.4
Investment Expenditure	Approx. 12	Approx. 12	12.5

-The Company aims to increase its sales of automotive electronic components by developing new components and realigning its product array.

R&D Expenditures

(in millions JPY)

	FY2010	FY2009	FY2008
Overall	28,124	27,843	40,304
Electronic components	11,813	9,612	13,850

R&D Structure

Automotive Division
- The Company conducts research and development of in-vehicle input devices and various sensors used in automotive body and drive control systems, mainly at its Furukwa Plant in Osaka. The Furukawa plant conducts activities, from developing parts, up to engineering systems products.

R&D Facilities

Sendai R&D Center

Miyagi Pref., Japan

R&D Activities

- During fiscal year 2010, the Company developed a trackball-type multi-input device, which offers various input functions with easy operations. It also engineered an overhead console module integrated with a composite antenna that enables passengers to operate in-vehicle electronic devices by means of body movement. Other achievements include development of a Bluetooth unit to connect mobile devices to in-vehicle equipment easily. In addition, the Company started to mass-produce infotainment control panels using seat insert forming technology.

-The Company has developed new technologies to enhance safety, security and maneuverability by attaching an overhead module on the top inside the cabin, which integrates multiple sensors and an antenna for communication. By constantly monitoring the cabin inside through cameras and sensors for moving objects, the module is capable of controlling the speed of airbag activation in case of an impact in accordance with the occupant's body type and sitting posture, as well as sending the image of intruders into a parked car to the portable terminal of its driver. It will also become possible to maneuver the car navigation system by gesturing. Sharing sensors and wirings among multiple systems can offer high-performance functions at lower cost. (From an article in the Nikkan Jidosha Shimbun on October. 4, 2010)

-The Company announced on April 6 that it has developed a new SKSG series TACT switch for automobiles, which offers both a high operation force to create a distinct operation feel and a long operating life of 200,000 cycles, which is double that of existing products. The company says mass production of the new technology already started this month. The switch uses a newly designed metal leaf spring contact. Reducing the load against the metal contact when pressed achieves high operation force of 4N, an increase of 50 percent compared with those of general switches used in car audio and visual equipment, as well as a longer life span. In addition, the size of the switch is only one third of conventional products, which makes the product suitable for compact in-vehicle equipment. (From an article in the Nikkan Jidosha Shimbun on April. 7, 2010)

Capital Investment

(in millions JPY)

	FY2010	FY2009	FY2008
Overall	23,544	18,480	47,202
Electronic components	16,671	11,914	34,363

Electronic component division
- The Electronic Component Division focused its investment activities on establishing an internal computer system, developing new products such as touch panel devices for smartphones; in-vehicle sensor switches; optical modules; contact sheets for cellular phones, and upgrading its production equipment.

Capital Investment Projects

Name (Location)	Division	Details of the facility	Planned investment (million yen)	Start	Estimated completion
Alps Electric Co., Ltd. Furukawa Plant and others (Osaki, Miyagi Pref.)	Electronic components	Equipment to produce electronic components	3,060	Apr. 2011	Mar. 2012
Alps Electric Co., Ltd. Headquarters (Ota, Tokyo)	Electronic components	Equipment  to produce systems products	2,312	Apr. 2011	Mar. 2012
Alps Electric Co., Ltd. Nagaoka Plant (Nagaoka City, Niigata Pref.)	Electronic components	Equipment to produce touch panels	2,266	Apr. 2011	Mar. 2012
Alpine Electronics, Inc. Iwaki Plant (Iwaki City, Fukushima Pref.)	Audio equipment	Machinery, tools, and dies	2,799	Apr. 2011	Mar. 2012