CEO Message

Dear shareholders and investors,

Thank you for your continued support of the Nissha Group.

Operating Results for the 1st Quarter Ended March 31, 2019

Junya Suzuki, President and CEO

The global economy, on the whole, gradually recovered in the three months ended March 31, 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 and capital investment. In Europe, the economy gradually recovered, though there was some weakness. In China, the economy started to slow down, and in other Asian emerging countries, the economic recovery turned out to be weak. The Japanese economy has continued a gradual recovery, although there are 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 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. The financial results for the three months ended March 31, 2019 lacked vigor on the whole. Though the Medical Technologies segment performed well, the demand fell short of the projection in the mainstay Devices segment and the Industrial Materials segment.
As a result, regarding the consolidated financial results for the three months ended March 31, 2019, the net sales were ¥34,964 million (a decrease of 3.7% as compared to the same period of the previous year). EBITDA was negative ¥170 million (positive ¥515 million in the same period of the previous year). Operating loss was ¥2,513 million (operating loss of ¥1,829 million in the same period of the previous year). Ordinary loss was ¥2,750 million (ordinary loss of ¥3,663 million in the same period of the previous year). Loss attributable to owners of parent was ¥3,263 million (loss attributable to owners of parent of ¥3,612 million in the same period of the previous year).

Forecast for the Year Ending December 2019

We expect to see increased demand for products in our mainstay Devices segment during the second quarter, recovering at a rapid clip through the second half of the fiscal year. Meanwhile, we forecast strong performance in our Industrial Materials and Medical Technologies segments.
We have made no changes to our earnings forecasts for the fiscal year ending December 2019. 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 to the Nissha Group as we grow into the future.

May 9, 2019
Junya Suzuki
Chairman of the Board
President and CEO

Junya Suzuki

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