Presentation Material

Company Information
May, 2014
Nitto Denko Corporation
Hideo Takasaki, President & CEO･COO
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
To Start
On Oct. 1, 2013
Nitto will further expand into business areas without being limited by the
word “Denko” (Electric Industries) and increase the brand power all over
the world with a more recognizable logo.
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
1
Contents
1. Review of FY2013
2. Direction of FY2014
3. Strategy of each business
4. Mid. term management plan Nitto-2016
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
2
1. Review of FY2013
2. Direction of FY2014
3. Strategy of each business
4. Mid. term management plan Nitto-2016
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
3
FY2013 Operating results
Unit：Billions of Yen
FY2012
Year-on-Year
Change (%)
FY2013
Net Sales
671.3
749.8
11.7%
Operating
Income
68.4
72.3
5.5%
Ordinary
Income
67.2
71.7
6.7%
Net Income
43.7
51.0
16.8%
10.2%
9.6%
-0.6p
6.3%
6.7%
0.4p
82.4
99.9
Operating
Margin
ROA
(Based on net income)
Exchange Rate
(¥/US$)
日東電工株式会社
NA
©2014 Nitto Denko Corporation. All Rights Reserved.
4
FY2013 Highlights and lowlights
1. Year-on-Year increase in sales and profit
Sales increased by 11.7% and operating income increased by 5.5%.
Though we revised downward the forecast, we finally marked
increases both in sales and profit.
2. Aggressive capital investments
We made a capital investments of a record-high 75.8 billion yen.
3. Activities toward centennial of FY2018
Changing a brand mark, moving and uniting the head office & Osaka
branch and renewing a corporate philosophy etc.
4. Change of the business circumstance of Information fine
materials div. was beyond what we expected
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
5
Sales & OP results by segments
Profit decrease of Optronics was covered by Industrial Tapes and Medical &
Membrane in FY2013 and the profit increase of the company was achieved
Operating Profit
Net Sales
(Unit : Billions of Yen)
FY2012
Industrial Tape
Optronics
Medical &
Membrane
FY2013
Functional base products
& Automobile products
252.0
283.1
Information fine materials
348.5
378.2
Flexible printed circuits
41.3
55.5
Processing materials
20.7
18.7
Medical products
15.1
17.3
Membrane products
18.6
FY2012
FY2013
12.2
17.3
56.4
52.4
0.3
1.8
20.3
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Total
671.3
749.8
68.4
72.3
＊ “Total” includes the trades between each segments or the profit which is belonging to corporate segment
日東電工株式会社 ©2014 Nitto Denko Corporation. All Rights Reserved. 6
Trend of capital investments and R&D expenses
we practiced a record–high capital investments in FY2013 and Information
fine materials was accounting for the large part of the total amount.
80
(Bln.¥)
75.8
Capital Investments (completion basis)
R&D Expenses
60
49.8
40
27.6
28.5
20
0
FY09
FY10
FY11
FY12
日東電工株式会社
FY13
©2014 Nitto Denko Corporation. All Rights Reserved.
7
Review of FY2013 / Operating profit
Though aided by the yen’s depreciation, we increased OP only by 6%
because of the keen competition of smartphone & tablet PC market.
Analysis of OP from FY2012 to FY2013
（Unit：bln.¥）
24.3
▲41.9
▲13.7
59.0
▲23.8
Keen competition
68.4
FY2012
・Among set makers of smart
phone & tablet PC
・Between ITO film & ITO glass
・Among ITO film makers
Sales Volume Streamlining Selling Price
/ Foreign Operation etc
Erosion
Exchange
Fixed
Cost
日東電工株式会社
Product mix
etc
72.3
FY2013
©2014 Nitto Denko Corporation. All Rights Reserved.
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1. Review of FY2013
2. Direction of FY2014
3. Strategy of each business
4. Mid. term management plan Nitto-2016
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
9
How we position the FY2014
A year to “Soar”
In the latter half of the 2nd stage of globalization,
we enhance “Product strength”,
“Information-gathering ability” & “Team strength”
and start achieving the results of ample business
strategy
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
10
FY2013 results and FY2014 forecast
Unit : Billions of Yen
FY2013
FY2014
Year-on-Year
Change (%)
Net Sales
749.5
780.0
4.1%
Operating
Income
72.5
78.0
7.6%
Ordinary
Income
72.5
78.0
7.6%
Net Income
51.9
57.0
9.8%
Operating
Margin
9.7%
10.0%
0.3p
6.8%
7.3%
0.5p
99.9
100.0
ROA
(Based on net income)
Exchange Rate
(¥/US$)
NA
＊From FY2014, we start to adapt International Financial Report Standard (IFRS) voluntarily and
日東電工株式会社 ©2014 Nitto Denko Corporation. All Rights Reserved.
11
the figures of FY2013 have been adjusted to IFRS standard.
Sales & OP plan by segments
Plan to increase OP mainly because of Optronics & Industrial tape in FY2014
Net Sales
Operating Profit
(Unit : Billions of Yen)
FY2013
Industrial
Tape
Optronics
Medical &
Membrane
Functional base products
192.6
FY2014
101.3
109.0
Information fine materials
378.1
388.0
Flexible printed circuits
55.5
61.0
Processing materials
20.1
22.0
Medical products
17.4
18.3
20.4
FY2014
193.0
Automobile products
Membrane products
FY2013
17.9
18.8
54.7
56.8
2.6
1.9
22.0
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Total
749.5
780
72.5
78.0
＊“Total” includes the trades between each segments or the profit which is belonging to corporate segment
＊From FY2014, we start to adapt International Financial Report Standard (IFRS) voluntarily and
日東電工株式会社 ©2014 Nitto Denko Corporation. All Rights Reserved.
12
the figures of FY2013 have been adjusted to IFRS standard.
Summary of the FY2014 strategy
Enter the new stage to achieve the results of ample business strategy
Industrial Tapes
＊Functional base products
Create ANT(Area Niche Top) products
＊Automotive products
With strengthening global activities, expand
the business to non-Japanese customers
Optronics
Information fine materials
Use the increased production capacity of ITO
film for touch panel and launch the new
products
Increase the customer of new polarizing film
and improve the productivity
Optronics
Medical & Membrane
Flexible printed circuits
Medical
Keep the present customers and get the new
customers for the display of smartphone
Processing materials
From the oversea market, expand the
new product which can contribute to
customer’s process innovation
Expand the sales of new drug delivery patch
named “Bisono” tape
Extend the contracted manufacturing service
of oligonucleotide synthesis drug
Membrane
Expand the business area from water treatment to the others
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
13
Capital investments and R&D expenses
Expand capital investments for the other segments than
Information fine materials in FY2014
（Bln.¥）
73.0
75.8
Other than
Information
fine materials
33.0
26.1
Information
fine materials
28.5
27.0
Capital
R&D
investment expenses
FY2013
FY2014
日東電工株式会社
FY2015
©2014 Nitto Denko Corporation. All Rights Reserved.
14
Trend of dividends
Just as the previous year’s figure, 100 yen per year is planned for FY2014.
We will adjust the figure as necessary in accordance with external
environment and situations concerning our operating income.
Yen per share
120
Yearly dividend per share
Mid-year dividend per share
(
) Under Review
80
40
50
50
(50)
(50)
50
50
50
(50)
FY11
FY12
FY13
FY14
50
40
35
40
30
20
30
35
FY05
FY06
40
40
40
20
0
FY07
FY08
FY09
FY10
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
15
1. Review of FY2013
2. Direction of FY2014
3. Strategy of each business
4. Mid. term management plan Nitto-2016
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
16
Market trend of 2014 by applications
Although tablet PC & smartphone market will continuously expand,
the low price model might be the mainstream in the market because
the growth will come from emerging countries
Forecast of LCD panel production in 2014 (M units）
Application
CY2013
CY2014（YOY）
TV
234
±0%
Monitor
161
-5 ～ -9%
Notebook PC
185
-10 ～ -14%
Demand will move to tablet PC
Tablet PC
236
+20 ～ +24%
Low price model will lead to the
market growth
1924
+5 ～ +9%
1040
+20 ～ +24%
Cell-phone
(including
smartphone)
Smartphone
＊External institution & company data
Market Trend
No unit production growth, but
the panel size will be larger
Demand of desktop PC will
decrease
Market expansion by
smartphone
Demand in China will expand
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
17
Market share of film touch panel by main applications
Film TP has gained high market share in smartphone & tablet PC
due to Nitto’s strong initiative.
Nitto will continuously promote ITO film for the wide range of
potential applications
Market share of film touch panel in 2013
Smartphone
Nonfilm
Tablet PC
Largely expanded
from 10% of 2011
Film
type
60%
40%
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
18
Growth strategy in touch panel market
Develop low resistance ITO film and consider the introduction
of new technology other than ITO film
Metal mesh
20”
Notebook PC
Display Size
Silver nano wire
Tablet notebook
10”
ITO film
5”
Smartphone
High
Tablet PC
Promote low
resistance value type
for large panel size
Surface resistance(Ω/□)
日東電工株式会社
Low
©2014 Nitto Denko Corporation. All Rights Reserved.
19
Forecast of automotive market
CAGR(2013-2018) of the overall market is 4%
Automotive production by areas (M units/year)
Asia
CAGR
+6%
+4%
Europe
Americas +3%
Japan
-4%
＊Data of external institutions
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
20
Strength of auto material business (1)
Supply functional products to the global market supply chain
Supply chain of
auto industry
Products supplied
Function needed
Air, sound, water proof,
Exterior
Power
train
Interior
Vibration-damping,
Reinforcing, Bonding, Fixing,
Protection, Buffering, Heat
release, Heat insulation,
Insulation, Shield etc.
OEM
Car maker
Tier1
Electric
Car electronics
1st auto parts maker
Tier2, 3
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
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Strength of auto material business (2)
Set up the full scale local production & processing of NVH factories
in overseas from 2008 and has completed the system for the local
supply globally
UK
Czech
Belgium Hungary
Turkey
Tianjin
Foshan
India
Thailand
Vietnam
Missouri
Japan
Shanghai
Xiamen
New Jersey
Mexico
Taiwan
Philippines
Indonesia
Australia
NVH products play the
role of door opener for the
local supply (NVH=Noise,
Vibration, Harshness)
Brazil
Start full scale of NVH production & processing after 2008
Start full scale of auto materials production & processing before 2008
日東電工株式会社
Processing only
©2014 Nitto Denko Corporation. All Rights Reserved.
22
Further strength is to supply auto electronics products
Take all the stable demand of NVH products and earn a return from
car electronics products for hybrid and next generation cars
Traditional Mkt.
Demand
image
Auto Type
Demand
image
◆NVH rltd.
Body(Interior,
Exterior)
◆Fix/Bonding
tape
Wire harness
Side molding
Mudguard
Emblem etc.
Gasoline
Growth Mkt.
◆Car electronics mtls.
(Heat resistant tape, Vent filter,
Thermal conductivity sheet,
Hybrid & next generation car
mtls.) Head lamp, ECU, Sensor,
Power control units, Battery,
Motor etc.
Acceleration of IT
Hybrid
Create new demand by
connecting auto makers to LCD
panel makers
◆Surface
protection
Coated body
Next generation
(EV, PHEV, FCEV etc)
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
23
Sales plan of auto material business
Plan the sales growth of over 10%(CAGR) which is higher than
car production growth(4%) by the expansion of overseas sales
CAGR over 10%
150
（億円）
(Bln.¥)
100
101.2
109.0
50
◆Set global
account management
◆Start operation
of Brazil factory
◆Strengthen
alliance
0
2013
2014
2016
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
24
Initiation of ANT candidates/Hygiene biz. fm Turkey
Build sales expansion system in China & ASEAN market which will
be enriched by economy growth
Nitto Bento is annually selling 10bln.yen of
diaper tape and hygiene products to Europe,
Middle East and North Africa
Develop new products by
Nitto
collaboration with functional
Bento
base product div.
Diaper tape
Hygiene products
＊ANT＝Area Niche Top product
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
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Initiation of ANT candidates/Challenge
to aircraft industry
Build sales globally which is originally initiated in US and expand
the material approval to Europe as well
France Germany
Asia
U.S.
Japan
Nitto
Sales
．
Market size of
aircraft tape
is18bln. yen
per year
＊ANT＝Area Niche Top product
日東電工株式会社
Go into high
gear from 2013
©2014 Nitto Denko Corporation. All Rights Reserved.
26
Initiation of ANT candidates /
Solve the problem of social infrastructure in China
Develop the biz. from anticorrosion tapes to the overall products
which can totally guard infrastructures
Corporate profile
Qingtao Hailan Nitto Technology. Co. Ltd.
Capital : 25M CNY
Capital Construction :
Nitto Denko 67%
Qingtao Hailan Material Technology 33%
Sales target : FY2014 2bln. yen
FY2018 20bln. yen
Exploit new markets
by the old technology
Start production & sales of
anticorrosion tape from 2014
Plan the production & sales after 2015
Onshore anticorrosion tape
Product : Nitohalmac XG
Waterproof tape
Underwater & underground
anticorrosion tape
Product : No. 59
Dustproof material
Product : Nitoroof
Product : YBMS
日東電工株式会社
Subway
waterproof
Measure for
PM2.5
©2014 Nitto Denko Corporation. All Rights Reserved.
27
Introduction of expected order
Expected order Petrochemical complexes wharf
Scale of order
Wharf steel pipes (4,000)
Type of anticorrosion
Underwater anticorrosion tape(No. 59)
Expected order receipt Summer in this year
Process
Please refer to the right Seawater
surface
Durability life
Over 20 years
Protective
layer FRP
Anticorrosion
tape
Steel pipe
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
28
Receiving orders from large industries in China
& many inquiries out of China
Gas
Shipbuilding
Use Japanese
origin technology
Petrochemical
complex
Nitto anticorrosion tape
Korea
Qingtao Hailan Nitto
Technology. Co. Ltd.
Port facility
Offshore
oilfield
India
Taiwan
Power
generation
Wind-power
generation日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
29
Steady progress of major theme for future growth
Timeline for anti-fibrotic drug development
Plans to initiate clinical study in U.S. this year in order to assess safety
and efficacy in patients, and expects to collaborate with drug company
from late P-2 stage toward approval in 2018 or after
FY2012
Pre-clinical IND
POC by
animals
2013
2018
2014 2015
Clinical study
Approval Launch
Practical use
Phase-1a：Safety
Safety verification by healthy individual
Phase-1b/-2a：POC
Safety and efficacy verification in patients
Option : Collaboration with pharma
POC: Proof of Concept
Verification of efficacy and safety
（Following U.S., clinical study in Japan will start as soon as the preparation is ready)
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
30
1. Review of FY2013
2. Direction of FY2014
3. Strategy of each business
4. Mid. term management plan Nitto-2016
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
31
Basic concept of Nitto-2016
Soar toward the future through structural reform and growth strategy
Performance Target：FY2016
Net Sales 920bln.¥、Operating profit 100bln.¥
Business Growth（ANT creation fm GCF）
Qualitative Improvement
-Structural Reform and Growth
strategy through ｢Mu･Gen･Dai」
・Biz diversification & early launch
・Strengthe existing biz foundation
・Strategic M&As
・Continued efforts for the
environment and better quality
・Upgrade global HQ functions
・Optimizing regional / group
company governance
Human resource growth
・Developing Nitto Persons worldwide ・Improving/Globalizing personnel system
Platform
New Corporate Philosophy（Mission＆The Nitto Way), Brand Logo
Niche Top Strategy（GNT/ANT), SAN-SHIN activities, Proximity to Customers
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
32
Capital Investment Plan
In Nitto-2016, almost half of total investments of 3 years (2014～2016) is
used for non-Optronics business in order to realize the healthy and steady
growth with a reform of business portfolio.
Nitto-2015（2013～2015）
Medical＆
Membrane
10%
Industrial
ﾃｰﾌﾟ Tape
30%
Optronics
60%
Nitto-2016（2014～2016）
22%
日本
38%
50%
28%
東ｱｼﾞｱ
26%
TOTAL：200～240bln.¥
TOTAL：200～220bln.¥
＊Industrial Tape consists of Functional base products and Automotive products
＊Medical＆Membrane includes corporate IT investment
日東電工株式会社 ©2014 Nitto Denko Corporation. All Rights Reserved.
33
Sales & operating profit plan
Take the new challenge to achieve 100bln. yen of operating profit
Net Sales
100bln.¥
（bln.¥）
Operating profit
（bln.¥）
72.5 bln.¥
78bln.¥
920
780
749.5
Net
Sales
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
34
＜Notes＞
This materials include forecasts and forward-looking statements determined by the Company based on
the currently available information that include risks and uncertainties. Please acknowledge that actual
results may vary significantly due to a number of important factors.
Contribute to customers’ value creation with innovative ideas
日東電工株式会社
©2014 Nitto Denko Corporation. All Rights Reserved.
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