CEO Message

To all our shareholders and investors

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

Fifth Medium-term Business Plan and its Progress

Junya Suzuki, President and CEO

The Nissha Group started operating the three-year Fifth Medium-term Business Plan on April 1, 2015, aiming for growth through a reorganization of our business portfolio. Our primary market at present, consumer electronics (IT) including smartphones and tablet devices, presents possibilities for ongoing expansion of business opportunities through innovation on the one hand, and risks of drastic fluctuations in product demand and declining product and service prices on the other. From the perspective of balanced management, we are pressed to establish a business base that enables a continuous and stable revenue stream, by overcoming our over-reliance on the ever-fluctuating consumer electronics field and increasing our overseas production ratio to develop our tolerance to foreign exchange fluctuations.
The major efforts to date are as follows.
  • Entry into the Metallized Paper field (Industrial Materials)
In August 2015, the Industrial Materials Business acquired the AR Metallizing Group, a global leader in metallized paper for high-end labels and packaging, and made it a subsidiary. In so doing, we incorporated production and sales of metallized paper, which is a business upstream of and closely related to the printing business, into our business portfolio and expanded our reach in the global market to include food, beverage, consumer products and others.
  • Expansion of the Automotive field (Industrial Materials)

Our Industrial Materials business unit aims to widen the scope in the automotive field which is expected to grow on a global basis and is designated as a key market, and is improving product line-ups and building supply chains adapting to the needs of our automotive customers. In October 2016, we acquired Schuster engaged in the manufacturing and sales of automotive interior plastic molded components in Europe, and Back Stickers including its related group companies engaged in the manufacturing and sales of decorative films as subsidiaries of Nissha. As the supply chains of the automotive market are spread in some communities of the world, we have expanded production bases in Southeast Asia, USA and Mexico so far. Through the acquisition of Schuster and Back Stickers Group, we gained manufacturing bases in Europe which is important to the automotive market along with new decoration technology and solid sales channels in Europe. In the future, we are planning to integrate Schuster and Back Stickers Group decoration technology, production know-how and sales channels with our existing network for the purpose of expanding its business in the automotive market.

  • Entry into the Medical Devices Market (Life Innovation)
In September 2016, we acquired, and made a subsidiary of, Graphic Controls Group, an US-based medical devices and consumables manufacturer, and positioned as a central business company of the life innovation business.
The medical devices and consumables sector in which the Graphic Controls Group is involved is forecast to grow on a global basis, against a backdrop of an increasingly aging society and proliferation of preventative medicine. The Graphic Controls Group manufactures and sells its own brand products to medical institutions such as hospitals, and also provides contract manufacturing services for major medical device manufacturers in the North and Central America and Europe. Their products, such as mainstay patient monitoring disposable products and medical surgical consumables for medical institutions, and manufacturing capabilities, such as converting technologies, electrode patterning formation and precision injection molding, have high compatibility with Nissha’s core technologies. The acquisition of the Graphic Controls Group provide us a broad product portfolio of medical devices and consumables and sales channels in the North and Central America and Europe to expand its business in the medical devices and consumables sector. Moving forward, we will utilize Graphic Controls Group as a platform to expand its business in the medical market.

Operating Results for the Fiscal year ended March 31, 2017

Reflecting on the global economy in the fiscal year ended March 31, 2017, the United States saw ongoing recovery thanks primarily to increased consumer spending and improved employment conditions. 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 partial signs of recovery. As for Japan, the economy held steady on an ongoing moderate recovery trend but uncertainty over overseas economies, foreign exchange fluctuations and other factors have fueled growing opacity for the future.
The Nissha Group is pursuing growth by reorganizing its business portfolio in the Fifth Medium-term Business Plan starting from April 1, 2015 and has been in a rush to establish a business base that enables a continuous and stable revenue stream, in such a way as to overcome its over-reliance on the ever-fluctuating consumer electronics field from a viewpoint of balanced management and increase its overseas production ratio to develop its tolerance to foreign exchange fluctuations. In the fiscal year ended March 31, 2017, the Nissha Group has made significant progress in expanding its business domain through corporate acquisition in the fields of automotive interior components and medical devices, following up on acquisitions in the metallized paper field in the previous year. Despite these efforts, the Nissha Group currently could not attain the previous estimate primarily due to the impact of foreign exchange fluctuations, sluggish demand for products in existing fields, and the posting of upfront costs for new orders and one-time expenses related to the acquisition.

Forecast for Fiscal year ended December 2017

 For Fiscal year ended December 2017, as the final year of the Fifth Medium-term Business Plan, we aim to complete the reorganization of our business portfolio.
The mainstay Devices business segment is projected to drive the profit on a company-wide basis, as new large-scale orders received advance to the mass-production phase. In the Industrial Materials segment, meanwhile, the sales for the automotive and metallized paper fields are forecasted to steadily increase. In the Life Innovation Business segment, Graphic Controls group will contribute to profit throughout the term due to its full-year inclusion in the scope of consolidation.For fiscal year ended December 2017, we expect increase sales and profits compared to nine months ended December 2016.

※We will change the fiscal year end from March 31 to December 31 and plan to unify the fiscal year on a global basis. The period of December 2017, which is the elapsed period, will be the nine-month account settlement period from April 1, 2017 to December 31, 2017.

In Closing

The Nissha Group promotes CSR activities on a continuous, global basis in order to build sound relations with stakeholders—including shareholders, customers, suppliers, society, and employees—and pursue a “mutually trustful Co-existence with society,” a goal enshrined in our corporate mission. The Co-existence cited in our corporate mission represents an ideal relationship in which both Nissha and our stakeholders have a vision, mutually affect each other toward realizing it, and together create value for the future. This philosophy is expressed in our new brand statement since April 2015, “Empowering Your Vision”.

We are making steady progress in the Fifth Medium-term Business Plan toward reorganizing our business portfolio and laying the foundation for future growth. I ask our
stakeholders for your continued support as developments unfold at the Nissha Group.
May 12, 2017
Junya Suzuki
President and CEO
Chairman of the Board

Junya Suzuki

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