Slide 1: Financial Results for FY2018.12 Q2 and Medical Technologies Presentation
Financial Results for FY2018.12 Q2 and Medical Technologies Presentation August 7, 2018 Junya Suzuki President and CEO Nissha Co., Ltd
Slide 2: Highlights
Highlights FY2018.12 H1 Results Both sales and profits improved from the revised forecast in May Devices: Although demand was generally weak, the mass production of 2018 models started. Industrial Materials: Demand progressed mostly as forecasted. Improvement in quality cost delayed in some of
Slide 3: FY2018.12 H1 (6 months) Results
FY2018.12 H1 (6 months) Results (Millions of yen) FY2018.12 FY2018.12 FY2017.12 Jan-Jun Jan-Jun Jan.-Jun. （H1） （H1） YoY results revised plan results May 10 Net Sales 71,084 71,000 72,542 +2.1% Industrial Materials 24,011 24,000 23,338 -2.8% Devices 31,557 29,600 32,012 +1.4% Medical Technologies 8,5
Slide 4: FY2018.12 Q2 (3 months) Results
FY2018.12 Q2 (3 months) Results (Millions of yen) FY2018.12 FY2018.12 FY2017.12 Jan-Mar. Apr.-Jun. Apr.-Jun. （Q1） （Q2） YoY QoQ results results results Net Sales 37,122 36,314 36,228 - 2.4% - 0.2% Industrial Materials 11,886 11,775 11,563 - 2.7% - 1.8% Devices 17,679 15,687 16,325 - 7.7% +4.1% Medica
Slide 5: Industrial Materials
Industrial Materials Progressed steadily for automotive and metallized paper markets Net sales trend by application (By quarter) (Millions of yen) ■High-function packaging materials 15,000 ■Decoration（Others） ■Decoration（Automotive） 13,088 12,126 11,886 12,309 11,775 11,563 12,500 10,000 7,500 5,000
Slide 6: Devices
Devices Demand in H1 was weak and remained as the previous year Net sales trend by application (By quarter) ■Portable game players, Industrial equipment, Automotive, Gas sensors and others ■Smartphones, Tablet devices and others 41,917 40,000 37,610 (Millions of yen) 30,000 20,000 17,679 15,687 16,3
Slide 7: Medical Technologies
Medical Technologies Both Q1 and Q2 exceeded the previous year, Expected annual sales of 20 billion yen Net sales trend by application (By quarter) ■Business media ■Medical devices（Own brand) ■Medical devices (Contract manufacturing) 5,085 5,107 5,000 4,880 4,461 4,535 (Millions of yen) 4,114 2,500
Slide 8: Medical Technologies
Medical Technologies Temporary expenses incurred in H1 for growth and optimization investments. EBITDA margin about 10% would have been secured, excluding temporary expenses (Millions of yen) FY2018.12 FY2018.12 FY2018.12 H1 Full year H1 simulation forecast results excluding temporary costs Heart Sy
Slide 9: Information and Communication
Information and Communication Demand progressed mostly as forecasted Net sales trend by application (By quarter) (Millions of yen) ■Others 5,000 ■Publication printing ■Commercial printing 4,310 3,772 3,873 3,347 3,016 3,121 2,500 0 1-3⽉ Jan.-Mar. 4-6⽉ Apr.-Jun. 7-9⽉ Jul.-Sep. 10-12⽉ Oct.-Dec. 1-3⽉2
Slide 10: FY2018.12 Full-year forecast (Revised forecast as of May 10) No change
FY2018.12 Full-year forecast (Revised forecast as of May 10） No change (Millions of yen) FY2018.12 FY2017.12 Full year Full year (Jan.-Dec.) YoY (Jan.-Dec.) Forecast Net Sales 193,481 217,000 +12.2% Industrial Materials 49,409 50,300 +1.8% Devices 111,084 131,800 +18.6% Medical Technologies 18,195 2
Slide 11: Reference: Capital investment, Depreciation, M&A investment, Amortization of goodwill, R&D cost
Reference: Capital investment, Depreciation, M&A investment, Amortization of goodwill, R&D cost (Millions of yen) FY2018.12 Q1 FY2018.12 Q2 (Jan.-Mar.) (Apr.-Jun.) results results Capital investment 3,431 1,745 Depreciation cost 1,955 1,889 M&A investment 39 2,877 Amortization of goodwill 388 *2018/
Slide 12: Medical Technologies Business Unit
MEDICAL TECHNOLOGIES BUSINESS UNIT Junya Suzuki President and CEO Sam Heleba Senior Vice President General Manager of Medical Technologies Business Unit INVESTORS CONFERENCE August 2018
Slide 13: We realize the enrichment of people's lives with our technologies
We realize the enrichment of people’s lives with our technologies. IT Automotive Market Medical Devices Product creation High-function packing materials Nissha’s core technologies Our growth strategy Printing Patterning Extension and integration of core technologies Making performance in global
Slide 14: M&A exerts growth
M&A exerts growth M&A investment in 2015-2017 was 35billion JPY and ROIC was 9%. ✔ *ROIC on cash basis = EBITDA * (1-tax rate 30％) / Investment Medical Devices (Medical Technologies) Graphic Controls Group Acquired: Sep 2016 Headquarters: US Integral Process Acquired: Oct 2017 Headquar
Slide 15: High expectation for the growth Medical Technologies
High expectation for the growth 350,000 Medical 300,000 Technologies Business Unit CAGR︓2017→2020 JPY in million Medical Technologies 250,000 Medical Technologies Business Unit CAGR 20% Acquired Graphic Controls in Sep 2016 200,000 Our 4th business unit 150,000 Devices CAGR 2% 100,000 Industrial
Slide 16: Why Graphic Controls?
Why Graphic Controls? (Center firm of Medical Technologies) DNA Core technologies Growth by transformation M&A capability NISSHA CONFIDENTIAL PROPRIETARY 16
Slide 17: Common core technologies and similar growth history
Common core technologies and similar growth history Devices Industrial Materials Medical Technologies Business Media Information and Communication Data recording Printing Coating Laminating Molding Patterning Printing since 1929 Printing since 1909 NISSHA CONFIDENTIAL PROPRIETARY 17
Slide 18: Medical Technologies management team
Medical Technologies management team with business experience around 150 years SAM HELEBA Senior Vice President | NISSHA 上席執⾏役員 メディカルテクノロジー事業部⻑ General Manager | NISSHA Medical Technologies President & CEO | Graphic Controls Holdings STEVE OKUMURA Deputy General Manager メディカルテクノロジー副事業部⻑ NISSHA Medic
Slide 19: Medical Technologies Business Unit (MTBU)
MEDICAL TECHNOLOGIES BUSINESS UNIT (“MTBU”)
Slide 20: Medical Devices / Business Media
Medical Devices Business Media ✔ ✔ Medical device design, Innovative consumable development & contract medical products direct to manufacturing services hospitals and distributors Industrial charts and markers NISSHA CONFIDENTIAL PROPRIETARY 20
Slide 21: Global Medical Footprint
Global Medical Footprint Over 1,300 Associates V B Buffalo, NY Torbay, UK Sandpoint, ID B B Hartford, CT Innsbruck, AT V V B Kyoto, JP Paris, FR Colorado Springs, CO B San Pedro, DR NISSHA CONFIDENTIAL PROPRIETARY 21
Slide 22: MTBU Pillars of Growth
MTBU Pillars of Growth Sustainable, Global & Scalable NISSHA CONFIDENTIAL PROPRIETARY 22
Slide 23: Target Segments
Target Segments Cardiology & Acute Care Consumables 3 ●Surgical Robots ●Artificial ●Dialysis Heart Circuit ●Stent ●Pacemaker ●Cardio ●Dialyzer Catheter ●Electrical ●Artificial ●Guidewires Scalpel Blood Vessels ●Endoscope ●Osteosynthesis 2 ●Ventilator FDA Class ●ECG ●Clip ●Blood Treatment Material Mo
Slide 24: Medical Device Market Trend
Medical Device Market Trend Increasing Opportunities (JPY in Trillions) OEMs are turning toward 25 manufacturers to 20 consolidate and outsource CAGR 7.3 more product lines. 15 4.9 10.5% We are highly sought 10 CAGR 4.2% after with vertically 13.4 15.8 integrated technologies 5 and paths of manufact
Slide 25: Building Technical Devices for OEMs
Building Technical Devices for OEMs In high CAGR Sectors for Loyal Customers ELECTROSURGICAL DEVICES CABLES & VASCULAR ACCESS LEADWIRES & GUIDE WIRES WEARABLE PATIENT MONITORING NISSHA CONFIDENTIAL PROPRIETARY 25
Slide 26: Partnering with many of the Top OEMs
Partnering with many of the Top OEMs The OEM trademarks identified herein are the trademarks of the respective OEMs, and not those of Nissha or any subsidiaries thereof. Nissha disclaims any affiliation, connection or association between its products or services and those of the respective OEMs. NIS
Slide 27: Paths of Optimization
One Partner – Design, Development & Manufacturing Added Project Idea Generation Project Outline Cost Reduction Innovation & Enhancements & Layout & Scheduling Initiatives Enhancement to Final Product Paths of Optimization MANUAL ASSEMBLY SEMI-AUTOMATION FULL-AUTOMATION NISSHA CONFIDENTIAL PROPRIETAR
Slide 28: Specialty Consumables Advancing Patient Care at Top Hospitals
Specialty Consumables Advancing Patient Care at Top Hospitals A Diverse & Growing Product Portfolio with a Stable CAGR DEFIBRILLATION PADS GROUNDING ECG PADS ELECTRODES PATIENT MONITORING CONSUMABLES NISSHA CONFIDENTIAL PROPRIETARY 28
Slide 29: Transferring Acquired Technology Worldwide
Transferring Acquired Technology Worldwide NISSHA CONFIDENTIAL PROPRIETARY 29
Slide 30: Graphic Controls track record of acquiring and integrating companies
MEDICAL TECHNOLOGIES Graphic Controls has an excellent track record of acquiring and integrating companies. Completing 7 medical device acquisitions worldwide in just 8 years. NISSHA CONFIDENTIAL PROPRIETARY 30
Slide 31: M&A Discipline: A Proven Process
M&A Discipline A Proven Process NISSHA CONFIDENTIAL PROPRIETARY 31
Slide 32: Medical Technologies Business Unit Mid-term Vision
Medical Technologies Business Unit Mid-term Vision (JPY in Billions) 35 32.0 30 25 20.0 20 18.2 15 10 5 0 FY2017.12 FY2018.12 FY2019.12 FY2020.12 NISSHA CONFIDENTIAL PROPRIETARY 32
Slide 33: Closing
' AlssHa |) CLOSING
Slide 34: Mid-term Vision: Profitability
Medical Technologies Business Unit Mid-term Vision EBITDA margin 30% （2020/12） *Size of circle: Sales Medical Devices ＝ （Dec 2020 expectation） Medical Technologies 25% Sales 32 High-function Sales CAGR 20.7% IT packing materials （2017/12〜2020/12） 20% EBITDA 4.5 EBITDA margin 14.1％ Profitability 15%
Slide 35: Confidentiality notice
This document contains confidential information and all rights regarding the document belong to Nissha Group. Therefore, any disclosure and/or leakage of the document to any third parties other than recipients of the documents, and copy, transfer and/or citation of the document without the prior aut