CEO Message

Dear shareholders and investors,

Thank you for your continued support of the Nissha Group.

Operating Results for the Fiscal Year Ended December 2018

Junya Suzuki, President and CEO

Reflecting on the global economy in the fiscal year ended December 31, 2018, the real economy remained solid despite the prevailing uncertainties in the outlook due to protectionist economic policies and 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.

The NISSHA 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 automotive, medical devices and high-function 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. During the fiscal year ended December 31, 2018, demand in the mainstay Devices segment, which was stagnant in the first half, turned into expansion trend in the second half resulting in improved revenue, and the companies acquired as a part of our growth strategy began to contribute to the operating results in the Medical Technologies segment.

As a result, regarding the consolidated financial results for the fiscal year ended December 31, 2018, the net sales were ¥207,404 million (an increase of 7.2% as compared to the same period of the previous year). EBITDA was ¥17,343 million (an increase of 14.9% as compared to the same period of the previous year). Operating profit was ¥8,071 million (an increase of 101.5% as compared to the same period of the previous year). Ordinary profit was ¥7,370 million (an increase of 49.3% as compared to the same period of the previous year). Profit attributable to owners of parent was ¥4,308 million (an increase of 60.7% as compared to the same period of the previous year).

*Nissha Co., Ltd. changed our consolidated fiscal year end from March to December in the last fiscal year. The transition period for the prior consolidated fiscal year was the nine-month period between April 1, 2017 to December 31, 2017. For comparison purposes, figures for the fiscal year ended December 2018 are compared with the period in the previous year from January 1, 2017 through December 31, 2017.

Forecast for the Year Ending December 2019

During the fiscal year ended December 31, 2019, the global economy is expected to remain on a moderate recovery trend, but it shows signs of slowdown in the economic recovery. We must continue to keep our eyes on uncertainties associated with movements in trade issues and policy trends in each country, impact from fluctuation in financial and capital markets, and other factors.

During the next term which is the second year of the Sixth Medium-term Business Plan, we intend to promote the growth of the focused markets by utilizing the methods including corporate acquisition in addition to the development of new products, and optimize the business portfolio.

For the consolidated financial results for the fiscal year ending December 31, 2019, we expect net sales of ¥195,000 million, EBITDA of ¥18,800 million, operating profit of ¥8,500 million, ordinary profit of ¥7,800 million, and profit attributable to owners of parent of ¥6,000 million. These figures are based on an exchange rate of 1US$ = ¥105

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. October 6, 2019 will mark our 90th year in business. We are calling 2019 Milestone 90 to reflect this important waypoint between our past and our future as we aim for even higher levels of growth.

Once again, I want to thank you, our shareholders and investors, for your support of the Nissha Group as we grow into the future.
February 14, 2019
Junya Suzuki
Chairman of the Board
President and CEO

Junya Suzuki

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