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 2nd Quarter Ended June 30, 2018

Junya Suzuki, President and CEO

Reflecting on the global economy in the six months ended June 30, 2018, the real economy remained solid despite the prevailing uncertainties in the outlook due to a rise in protectionist economic policies and raising concerns about trade frictions. The United States saw ongoing economic recovery thanks primarily to increased consumer spending and capital investment. In Europe, the economy gradually recovered, while 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.
We have set the four markets, i.e., the markets of consumer electronics (IT), automotive, medical devices and high-function packaging materials as our focused markets in the Sixth Medium-term Business Plan starting from January 1, 2018 and aim 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 our existing business bases acquired or developed heretofore. During the six months ended June 30, 2018, while the Medical Technologies segment steadily implemented the growth strategy of the Medium-Term Business Plan, including the successive acquisition of U.S. -based medical devices manufacturers, the sales of the mainstay Devices segment remained at the same level as the previous year with demand for products, primarily for smartphones, significantly lower than the initial forecasts.
As a result, the net sales for the six months ended June 30, 2018 were ¥72,542 million (an increase of 2.1% as compared to the same period of the previous year). EBITDA was ¥132 million (a decrease of 95.6% as compared to the same period of the previous year). Operating loss was ¥4,476 million (operating loss of ¥2,480 million in the same period of the previous year). Ordinary loss was ¥5,954 million (ordinary loss of ¥2,843 million in the same period of the previous year). Loss attributable to owners of parent was ¥6,754 million (loss attributable to owners of parent of ¥4,607 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 six months ended June 30, 2018 below are compared with those for the same period of the previous year (January 1, 2017 to June 30, 2017).
* In our Group, based on business expansion of global bases and the increase in overseas consolidated subsidiaries, we elected to employ EBITDA as our major profitability indicator at the same time as we started the 6th Medium-term Business Plan. EBITDA is the total of operation profit, depreciation, and amortization of goodwill.

Forecast for Fiscal Year Ending December 2018

In the second half of the fiscal year ending December 2018, we expect to see growing demand for products in our key Devices business unit, which should contribute to the company’s performance recovery. We also foresee steady performance in our Industrial Materials and Medical Technologies business units.
Our business forecast for the fiscal year ending December 2018 is 217 billion yen for net sales, 20 billion yen for EBITDA, 10.2 billion yen for operating income, 9 billion yen for ordinary income, and 7 billion yen for profit attributable to owners of parent.

In Closing

Our Mission is to contribute to the realization of value proposition and the enrichment of people’s lives. This will be achieved by creating highly competitive, distinctive products and services out of diversification of human resources capabilities and core technologies as the driving force for growth. Based on our Mission, we aim to improve corporate value through the successful execution of our Medium-term Business Plan, achievement of a well-balanced management of the business portfolio.
I would like to take this opportunity to thank you all our shareholders and investors for your continued support to us looking ahead to future growth.

August 7, 2018
Junya Suzuki
Chairman of the Board
President and CEO

Junya Suzuki

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