Slide 1: Financial Results for FY2019.12 Q2
Financial Results for FY2019.12 Q2 Ended June 30, 2019 August 6, 2019 Junya Suzuki President and CEO Nissha Co., Ltd.
Slide 2: Highlights
Highlights FY2019.12 H1 Results ⚫ Lower demand caused weaker revenue (1USD=JPY110) ⚫ Net sales 73.1 billion yen, EBITDA -1.0 billion yen, Operating loss 5.8 billion yen, Ordinary loss 6.3 billion yen, Net loss 7.5 billion yen ⚫ Devices: Weaker demand for smartphones led low operation rate of product
Slide 3: FY2019.12 H1 (6 months) Results
FY2019.12 H1 (6 months) Results (Millions of JPY) FY2018.12 FY2019.12 FY2019.12 H1 H1 H1 YoY Results Plan Results Net Sales 72,542 78,000 73,100 +0.8% Industrial Materials 23,338 24,800 23,554 +0.9% Devices 32,012 37,200 33,466 +4.5% Medical Technologies 9,987 12,500 12,285 +23.0% Information and Co
Slide 4: FY2019.12 Q2 Results
FY2019.12 Q2 Results (Millions of JPY) FY2018.12 FY2019.12 FY2019.12 Q2 Q1 Q2 Result Result Result YoY QoQ Net Sales 36,228 34,964 38,136 +5.3% +9.1% Industrial Materials 11,563 11,672 11,882 +2.8% +1.8% Devices 16,325 15,072 18,394 +12.7% +22.0% Medical Technologies 5,107 6,145 6,140 +20.2% -0.1% I
Slide 5: Industrial Materials
Industrial Materials Demand decrease for Chinese market and staying quality issues at some overseas molding factories Net sales trend by application (by quarter) （Millions of JPY) 25,000 ■Sustainable Packaging Materials (Metallized paper) ■Decoration (Others) ■Decoration (Mobility (Automotive)) 20,0
Slide 6: Devices
Devices Weaker demand for smartphones Net sales trend by application (by quarter) ■Portable game players, Industrial equipment, Mobility (Automotive), Gas sensors and others ■Smartphones, Tablet devices and others （Millions of JPY) 50,000 48,029 43,500 40,000 30,000 20,000 18,394 15,687 16,325 15,07
Slide 7: Medical Technologies
Medical Technologies Steadily progressing primarily for the contract manufacturing Net sales trend by application (by quarter) （Millions of JPY) ■Business media 10,000 ■Medical Devices (Own brand) ■Medical Devices (Contract manufacturing) 7,500 6,336 6,145 6,140 6,028 4,880 5,107 5,000 2,500 0 Q1 Q2
Slide 8: Information and Communication
Information and Communication Seasonal demand decrease in Q2 Net sales trend by application (by quarter) （Millions of JPY) ■Others 8,000 ■Publication printing ■Commercial printing 6,000 3,873 3,974 4,000 3,121 2,967 1,977 2,000 1,624 0 Q1 Q2 Q3 Q4 Q1 Q2 FY2018.12 FY2019.12 Business restructuring CON
Slide 9: Revision to the Business Forecast
Revision to the Business Forecast Tendency of the lower demand in H1 continues to H2. H1 H2 Full year ■Net sales ■Operating profit (Millions of JPY) 195,000 180,000 117,000 106,900 12,500 78,000 73,100 8,500 7,329 1,500 Previous Results Previous Revised Previous Revised Forecast Forecast Forecast Fo
Slide 10: Revision to the Business Forecast
Revision to the Business Forecast (Millions of JPY) Previous Forecast (Feb. 14) Revised Forecast (Aug. 6) FY2019.12 FY2019.12 FY2019.12 FY2019.12 FY2019.12 FY2019.12 Plan H1 H2 Plan H1 H2 Plan Plan Results Plan Net sales 195,000 78,000 117,000 180,000 73,100 106,900 Industrial Materials 51,800 24,80
Slide 11: Update on The 6th Medium-term Business Plan (2018-2020)
Update on The 6th Medium-term Business Plan (2018-2020) CONFIDENTIAL AND PROPRIETARY
Slide 12: Medium-term Vision: Completion of Balanced Management in Our Business Portfolio
Medium-term Vision: Aim for “Completion of Balanced Management in Our Business Portfolio” IT non-IT ⚫ Profitability and ⚫ Growth through M&A efficiency Sustainable Mobility IT Medical Devices Packaging Materials (Automotive) CONFIDENTIAL AND PROPRIETARY 12
Slide 13: 3 actions
3 actions Previous Present Actions assumption ⚫ Decreasing demand ⚫ High seasonal 1. Save of fixed IT ⚫ Increasing demand fluctuation in cost demand 2. Encashment of Capital for ⚫ Generated out ⚫ Not enough non-business investment of IT only from IT properties ⚫ Expansion, ⚫ Expansion, Non-IT Strong
Slide 14: Action1: Save of fixed cost
Action1: Save of fixed cost Demand decrease for smartphones can level production volume fluctuations and save idle labor cost Present Target situation High seasonal volume fluctuation Stable production volume for smartphones in spite of low demand ■Demand ■Demand Demand Demand ---- Labor cost ---- L
Slide 15: Action2: Encashment of non-business properties
Action2: Encashment of non-business properties To secure capital for growth in a size of 10 billion yen by the end of 2020 Previous assumption Present Capital for investment Capital for investment ⚫ Operating CF out of IT business ⚫ Operating CF out of IT business ⚫ Financing (Debt) ⚫ Financing (Deb
Slide 16: Action3: Attentive M&A - Target areas
Action3: Attentive M&A Target areas To enrich product lineup DDS - Dosage form change Medical Devices ⚫Cardiology To extend design and ⚫Acute care development capabilities ⚫Consumables Share extension for metallized paper New sustainable packaging materials Sustainable Packaging Materials Mobility B
Slide 17: Action3: Attentive M&A - M&A capability
Action3: Attentive M&A M&A capability ⚫ ROIC８% at least ⚫ Common ground for core ⚫ Less reliance on bidding technologies ⚫ Bargaining power ⚫ No exit of management ⚫ PMI experience Recent acquisitions Medical Devices 2016 2017 2018 ⚫ Investment 37.5 billion yen, ROIC 9% *ROIC on cash basis = EBITDA
Slide 18: Priority on investment for non-IT growth; shift to balanced capital allocation
Short term: Priority on investment for non-IT for growth Medium term: Aim to shift to balanced capital allocation Short term Medium term (Action2) (After completion of balanced management) Encashment of non-business properties In a scale of 10 billion yen Operating CF by the end of 2020 ✔ ✔ Return ✔
Slide 19: Active employees contribute to enhance corporate value
Active employees contribute to enhance corporate value ⚫ To raise employees’ awareness of the Company’s share price and the business performance ⚫ The Company’s share to be acquired via the stock market or by subscription to the disposition of the Company’s treasury shares (To be published after det
Slide 20: Reference: Capital investment, Depreciation, M&A investment, Amortization, R&D
Reference: Capital investment, Depreciation, M&A investment, Amortization of goodwill, R&D （Million of JPY） FY2019.12 Q1 FY2019.12 Q2 results results Capital investment 1,602 2,187 Depreciation 1,943 2,003 M&A investment - - Amortization of goodwill 400 *2018/12期より国内グループ会社の減価 償却の方法を定率法から定額法に変更しています。
Slide 21: 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