CEO Message

Dear shareholders and investors,

Thank you for your continued support of the Nissha Group.

Operating Results for the 3rd Quarter Ended September 30, 2019

The global economy, on the whole, gradually recovered in the nine months ended September 30, 2019, despite the prevailing uncertainties in the outlook due to protectionist economic policies and trade frictions, and the weakness found in some areas. The United States saw ongoing economic recovery thanks primarily to increased consumer spending. In Europe, the economy gradually recovered, though there was some weakness. In China, the gradual economic slowdown continued, and in other Asian emerging countries, the economic recovery turned out to be weak. The Japanese economy has continued a gradual recovery overall, although there is some weakness in its export and production.
The Group has been currently operating the Sixth Medium-term Business Plan (three-year plan) centering on the growth by reorganizing and optimizing its business portfolio. We have set the markets of mobility (automotive), medical devices and sustainable packaging materials as our focused markets, in addition to the mainstay consumer electronics (IT), and aim to develop well-balanced business bases and enhance our corporate value by implementing global based growth strategy. Regarding the financial results for the nine months ended September 30, 2019, demand for the Devices segment fell short of the projection, despite turning into an expansion trend during the third quarter ended September 30, 2019. The operation of the production department was not fully active as demand for the Industrial Materials segment fell short of the projection. The Medical Technologies segment experienced robust demand.
As a result, regarding the consolidated financial results for the nine months ended September 30, 2019, the net sales were \125,409 million (a decrease of 11.0% as compared to the same period of the previous year). EBITDA was \2,757 million (a decrease of 69.2% as compared to the same period of the previous year). Operating loss was \4,372 million (operating profit of \1,963 million in the same period of the previous year). Ordinary loss was \5,067 million (ordinary profit of \1,400 million in the same period of the previous year). Loss attributable to owners of parent was \2,125 million (profit attributable to owners of parent of \456 million in the same period of the previous year).

Forecast for the Year Ending December 2019

For consolidated business forecast for FY2019, we have reviewed the latest demand trends, taking into account other factors based on the results for the nine months ended September 30, 2019. Net sales are expected to decrease compared to the previous forecast because of lower demand in the Devices segment and the Industrial Materials segment compared to our previous estimate.
For profit, in addition to the decrease in net sales, EBITDA, operating profit and ordinary profit are expected to fall below the previous forecast mainly owing to the lower operation at domestic plants due to the decrease in net sales. Regarding profit attributable to owners of parent, we recorded profit from the transfer of idle fixed assets, but it is expected to decrease compared to the previous forecast due to the review of EBITDA, operating profit and ordinary profit.

  Previous Forecast
FY2019.12 Full year
(Jan.-Dec.)
Revised Forecast
FY2019.12 Full year
(Jan.-Dec.)

Net Sales

(Millions of yen)

180,000 173,000

EBITDA

(Millions of yen)

11,800 6,000

Operating profit

(Millions of yen)

1,500 -3,800

Ordinary profit

(Millions of yen)

500 -5,000

Profit attributable to owners of parent

(Millions of yen)

0 -2,100

In Conclusion

Our mission is to use the diverse talents of our people and our core technologies as an engine for growth to create highly competitive, feature-rich products and services that offer value to customers and contribute to better lives for all. Guided by this mission, we are executing our medium-term business plan to achieve a balanced business and improved corporate value.

Once again, I want to thank you, our shareholders and investors, for your support to the Nissha Group as we grow into the future.
November 8, 2019
Junya Suzuki
Chairman of the Board
President and CEO

Junya Suzuki

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