CEO Message

To all our shareholders and investors

We extend our sincere gratitude to all shareholders and investors for your continued support.
 

Operating Results in the First Quarter Ended March 31, 2018

Junya Suzuki, President and CEO

Reflecting on the global economy in the three months ended March 31, 2018, the United States saw ongoing steady economic recovery thanks primarily to increased consumer spending and capital investment. In Europe, there remained uncertainty for the future attributable to Brexit and other factors, but the economy gradually recovered. In Asia, the economies of emerging countries such as China showed signs of recovery. As for Japan, the economy held steady on an ongoing moderate recovery trend, but due consideration must be given to uncertainty over overseas economies, foreign exchange fluctuations and other factors.
The Nissha Group has set the four markets, i.e., the markets of consumer electronics (IT), automotive, medical devices and high-function packaging materials as its focused markets in the Sixth Medium-term Business Plan starting from January 1, 2018 and aims to achieve a well-balanced management of the business portfolio that is further reorganized and optimized by its global based growth strategy that fully utilizes its existing business bases acquired or developed heretofore. The financial results for the three months ended March 31, 2018 progressed as projected in general. While demand for products in the Industrial Materials segment and the Medical Technologies segment progressed steadily, the mainstay Devices segment was less vigorous due to decrease in demand for products.

As a result, the net sales for the three months ended March 31, 2018 were ¥36,314 million (an increase of 6.9% as compared to the same period of the previous year) and EBITDA was ¥515 million (a decrease of 12.7% as compared to the same period of the previous year). For income, operating loss was ¥1,829 million (operating loss of ¥2,273 million in the same period of the previous year), ordinary loss was ¥3,663 million (ordinary loss of ¥2,642 million in the same period of the previous year), and loss attributable to owners of parent was ¥3,612 million (loss attributable to owners of parent of ¥4,053 million in the same period of the previous year).

* Effective from the fiscal year ended December 31, 2017, the Company changed the fiscal year end date from March 31 to December 31. In line with this change, the term of the fiscal year ended December 31, 2017, which served as the transitional period, was nine months from April 1, 2017 to December 31, 2017. Therefore, business results for the three months ended March 31, 2018 are compared with those for the previous corresponding term (January 1, 2017 to March 31, 2017).

Reflecting on the global economy in the three months ended March 31, 2018, the United States saw ongoing steady economic recovery thanks primarily to increased consumer spending and capital investment. In Europe, there remained uncertainty for the future attributable to Brexit and other factors, but the economy gradually recovered. In Asia, the economies of emerging countries such as China showed signs of recovery. As for Japan, the economy held steady on an ongoing moderate recovery trend, but due consideration must be given to uncertainty over overseas economies, foreign exchange fluctuations and other factors.
The Nissha Group has set the four markets, i.e., the markets of consumer electronics (IT), automotive, medical devices and high-function packaging materials as its focused markets in the Sixth Medium-term Business Plan starting from January 1, 2018 and aims to achieve a well-balanced management of the business portfolio that is further reorganized and optimized by its global based growth strategy that fully utilizes its existing business bases acquired or developed heretofore. The financial results for the three months ended March 31, 2018 progressed as projected in general. While demand for products in the Industrial Materials segment and the Medical Technologies segment progressed steadily, the mainstay Devices segment was less vigorous due to decrease in demand for products.

As a result, the net sales for the three months ended March 31, 2018 were ¥36,314 million (an increase of 6.9% as compared to the same period of the previous year) and EBITDA was ¥515 million (a decrease of 12.7% as compared to the same period of the previous year). For income, operating loss was ¥1,829 million (operating loss of ¥2,273 million in the same period of the previous year), ordinary loss was ¥3,663 million (ordinary loss of ¥2,642 million in the same period of the previous year), and loss attributable to owners of parent was ¥3,612 million (loss attributable to owners of parent of ¥4,053 million in the same period of the previous year).

* Effective from the fiscal year ended December 31, 2017, the Company changed the fiscal year end date from March 31 to December 31. In line with this change, the term of the fiscal year ended December 31, 2017, which served as the transitional period, was nine months from April 1, 2017 to December 31, 2017. Therefore, business results for the three months ended March 31, 2018 are compared with those for the previous corresponding term (January 1, 2017 to March 31, 2017).


Forecast for Second Quarter Ending June 2018 and Fiscal Year Ending December 2018

Regarding the business forecast for the first half and the full year of FY2018, we have reviewed the latest trend of products demands based on the currency movement and the actual results for the three months ended March 31, 2018, and revised the business forecast as below, on May 10, 2018. Net sales is expected to decrease compared to the previous forecast primarily because products demands for smartphone of our mainstay Device in the second quarter are expected to fall below the original forecast. Therefore, EBITDA and operating profit are expected to decrease compared with the previous forecast and in addition to the downward revision of operating profit, ordinary profit and profit attributable to owners of parent are expected to decline below the previous forecast mainly due to impact of foreign exchange losses in the first quarter.
  Previous forecast Revised forecast
  First half of
FY2018
(Jan.-Jun. 2018)
FY2018 First half of
FY2018
(Jan.-Jun. 2018)
FY2018
Net sales (Millions of yen) 81,000 227,000 71,000 217,000
EBITDA(Millions of yen) 3,500 24,800 △1,300 20,000
Operating profit(Millions of yen) △1,300 15,000 △6,100 10,200
Ordinary profit(Millions of yen) △1,500 14,500 △7,000 9,000
Profit attributable to owners of parent(Millions of yen) △2,400 11,000 △7,400 7,000
Basic earnings per share(yen) △47.40 217.23 △146.86 138.92

Sixth Medium-term Business Plan

The Nissha Group have fused our printing technology with elements such as lamination, coating, molding, and patterning in a constant effort to enhance our core technologies, create distinct product lines, diversify our markets, enter into the global market, and expand our business domains. At present, we view growth through the reorganization and optimization of our business portfolio as central to our management strategy.
In the course of the Fifth Medium-term Business Plan (April 2015–December 2017), we secured large orders through enhanced product development and production capacity for the IT market, while executing an aggressive M&A strategy with the aim of reorganizing and optimizing our business portfolio. This culminated in an expansion of bases catering to the automotive market and our entrance into the medical devices market and the high-function packaging materials market. With the expansion of our business domains, we now have more than 50 business bases in and outside Japan, and more than half of our employees work at overseas bases.
Building on these achievements, the Nissha Group has set the four markets, i.e., the markets of consumer electronics (IT), automotive, medical devices and high-function packaging materials as its focused markets in the Sixth Medium-term Business Plan starting from January 1, 2018 and aims to achieve a well-balanced management of the business portfolio that is further reorganized and optimized by its global based growth strategy that fully utilizes its existing business bases acquired or developed heretofore. Our sights are set on optimal distribution of consolidated financial results between our four priority markets, and new records in all areas of net sales, EBITDA, and operating income in the fiscal year ending December 2020.

* In the light of the Nissha Group’s global business expansion and increase in number of consolidated subsidiaries outside Japan, we adopted earnings before interest, taxes, depreciation, and amortization (EBITDA) as a major financial index with the start of the Sixth Medium-term Business Plan. In addition, EBITDA is the total of operating profit, depreciation and amortization of goodwill.
 

In Closing

We are committed to execute our mission, realizing the enrichment of people’s lives by creating technology and developing it into economic and social value through the diverse capabilities, passion, and leadership of the global Nissha Group. Based on this mission, we will strongly promote the Sixth Medium-term Business Plan and strive to further improve corporate value.
I ask our stakeholders for your continued support as developments unfold at the Nissha Group.
May 10, 2018
Junya Suzuki
Chairman of the Board
President and CEO

Junya Suzuki

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