Presentation Material

Best Solution & True Innovation

Presentation Material First Half of Fiscal Year Ending March 31, 2016 November 4, 2015

Nippon Chemi-Con Corporation


Nov 4 , 2015

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Best Solution & True Innovation Contents 1.

Strengthening corporate governance

2.

Outlook for the second half of FY2015

3.

Practice of management innovation


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Best Solution & True Innovation １．Strengthening Corporate Governance Basic Approach to Corporate Governance Nippon Chemi-Con works continuously to pursue best corporate governance to realize its corporate philosophy. From the viewpoint of facilitating the sustained growth and improvement of the corporate value of the company, Nippon Chemi-Con works to improve corporate governance by ensuring transparency and fairness of decision-making, efficiently using company's business resources, and increasing the vitality of the management by making decisions rapidly and decisively. Basic Policy for Corporate Governance We have established our Basic Policy for Corporate Governance on October 26 to clarify specific actions we need to take and to ensure accountability to our shareholders. To realize constructive dialogue with shareholders, we disclose its contents and enhance corporate governance.


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Best Solution & True Innovation CHEMI-CON REPORT

To promote dialogues with stakeholders from medium to long term perspective and increase corporate value of the company, Nippon Chemi-Con publishes CHEMI-CON REPORT which integrates financial information and non-financial information. We will work to improve this report with the help of the opinions from readers. Financial information Conventional disclosure + ROE etc.

Nonfinancial information

To build a new relationship with our stakeholders

Environment Social Governance


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Best Solution & True Innovation Medium to long term Vision

Ｖ 3

● Medium to long term Vision

Aim to become a company with net sales of 200 billion yen per year in the early 2020

Aiming to increase shareholder value by sustainable growth strategy and aggressive management ● Third step

Enhance functional devices business and functional materials business

2 １

● Second step

Develop DLCAP™business into a business that rivals our aluminum electrolytic capacitor business ● First step

Establish overwhelming competitive advantage in aluminum electrolytic capacitors business

Reinforce alliance partnership to enhance each business Nippon Chemi-Con Corporation

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Medium to long term Goals

ROE: 10% or more

Ｇ

● Goal: return on equity of 10% or more

ROE goal: 10％ or more

3

● Third step

Strengthening financial base, FCF focused ⇒ Aggressive investment, Equity ratio of 50% or more

2 １

● Second step

Total asset turnover ratio:1.0 or more ● First step

Operating income margin: 10%

Shift the earnings structure by clarification of business strategies Nippon Chemi-Con Corporation

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2.


3.



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Best Solution & True Innovation Consolidated Results Forecast FY2014 (Actual)

Net sales

(Million Yen)

FY2015 (Revised Forecast)

Difference

123,365

120,000

（3,365)

Operating income

5,122

4,000

（1,122)

Ordinary income

6,207

3,800

（2,407)

Net income

5,362

3,000

（2,362)

3.7％ 7.6％

2.1％ 3.8％

-1.6％ -3.8％

￥109.93 ￥138.77

￥120.90 ￥135.04

Capital Investment

5,203

6,000

797

Depreciation and amortization

7,373

7,300

(73)

R&D Expenses

4,160

4,500

340

ＲＯＡＲＯＥ Average exchange rate 1US$ (JPY) 1EUR (JPY)


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Best Solution & True Innovation Sales by product category FY2014 Actual

( Million Yen )

FY2015 1H (Actual)

FY2015 Forecast

YoY

2H(Forecast)

104.195

52,095

50,505

102,600

-1.5％

10,404

5,043

5,257

10,300

-1.0%

DLCAPTM

4,302

1,952

2,248

4,200

-2.4％

Other Capacitors

4,126

1,762

1,838

3,600

-12.7％

112,624

55,809

54,591

110,400

-2.0％

Electro-Mechanical Parts and Other Parts

2,720

1,358

1,342

2,700

-0.7％

Capacitor Materials

5,902

2,489

2,611

5,100

-13.6％

Other

2,118

966

834

1,800

-15.0％

123,365

60,623

59,377

120,000

-2.7％

Aluminum Electrolytic Capacitors (Conductive Polymer Aluminum Solid Capacitors)

Capacitors Total

Total


FY2015

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Best Solution & True Innovation Sales by Region (All products) 100% 90%

Japan

24%

80%

22%

22%

Americas

70%

10%

60%

10%

11%

11%

10%

10%

Europe

50% 40% 30%

China

44%

43%

43%

20% 10% 0%

Other Asia

12%

14%

14%

FY2014

FY2015

FY2015

Actual

1H

Forecast


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Best Solution & True Innovation Sales by Market (Aluminum Electrolytic Capacitors ) 100% 90%

Automotive electronics

21%

23%

23%

80% 70% 60% 50% 40%

Industrial equipment

26%

New Energy

3% 10%

33%

10% 0%

3% 10%

Home Appliances

23% 3% 10%

ICT

30% 20%

23%

34%

34%

Other

7%

7%

7%

FY2014 Actual

FY2015 1H

FY2015 Forecast


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Best Solution & True Innovation Sales by Market (All products)

Automotive electronics market to grow（Further development of electronic control, strong demand for ceramic capacitors and module products), Slowdown in industrial equipment market 100% 90%

Automotive electronics

24%

26%

26%

80% 70% 60%

Industrial equipment

27%

23%

23%

New Energy

50% 40%

3% 9%

30% 20%

Home Appliances

3% 9%

ICT

30%

10% 0%

3% 9%

32% Other

32%

7%

7%

7%

FY2014

FY2015 1H

FY2015 Forecast


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2.


3.



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Best Solution & True Innovation ３.Practice of Management Innovation 1)

Total optimization by integrated operation of material division and assembling division

2)

Strengthening aluminum electrolytic capacitors business Clarifying supervisory responsibility for each product category

3)

Cost reduction and increase in asset turnover ratio by intensification of production items of aluminum electrolytic capacitors

4)

Supply Chain Management Reform (Reduction in SG&A expenses, reduction in inventories, optimization of lead time etc.)

5)

Strengthening management of affiliated companies (Intensification and enhanced management control)


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Best Solution & True Innovation To our Shareholders, Investors, and Stakeholders

Nippon Chemi-Con has outlined our 3-year goals and 10-year vision as we aim to continuously improve corporate value. Ikuo Uchiyama, President


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〔Note〕 The projected performance figures in this material are based on information available to Nippon Chemi-Con’s management at the time this material was prepared. There are many uncertain factors inherent in forecasting, and there might be cases in which actual results differ from forecast values. Nippon Chemi-Con undertakes no obligation to publicly update or revise any forward-looking statements included in this material. If you are interested in investing in Nippon Chemi-Con, you are requested to make a final investment decision at your own risk. Please note that neither Nippon Chemi-Con nor any third party providing information shall be responsible for any damage or loss you may suffer due to investment in Nippon Chemi-Con based on the information shown in this material.


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