CMK CORPORATION（Stock code：6958）

1H FY2016 Financial Results(presentation material)

November 25, 2016
CMK CORPORATION

1Contents

1. 1H FY2016 Financial Results
2. Progress of Medium-Term Management plan
3. Supplementary material on financial results2

1. 1H FY2016 Financial Results(Six months ended September 30, 2016)3

1. (1)Overview• Strong sales of products for automotive use helped to make up for the decline
in income affected by a strong yen, maintaining almost the same level of sales
as previous fiscal year.
• In Japan, profitability was improved significantly by streamlining business
operations (the downsizing of domestic production and a voluntary retirementprogram).
• Overseas profitability was remarkably improved by reducing fixed costs andimproving manufacturing yield.

• As a result, we have succeeded in turning the consolidated operating profit intoa surplus since the previous year.

41. (2)Consolidated Financial Results（Millions of Yen）

1H FY2015(Results)

1H FY2016(Results)

Sales

35,94935,785-163-0.5%Operating income▲502860+1,363－Ordinary income▲1,425776+2,202－Profit attributableto owners of parent▲8,485802+9,288－120.50

111.47-9.03

Exchangerate(USD)YoYChange

YoY%

-7.5%
5

1. (3)Sales by application（Hundred Millions of Yen）

Car electronics
1H FY2016(Results)

1H FY2015(Results)•AV equipment
Mobile communications

5240

050

100

Digital still camera
Amusement Others

3 813 11253

Car electronics•AV equipment
Mobile communications

Digital still camera
Amusement Others

15200

250

359

68

15 13150

357

67300

350

400

Sales of products for automotive use increased compared with previous fiscal year, helpedby the increased sales of the Advanced Driver Assistance System (ADAS) as well as
further sales promotion such as exploring new business from existing customers andacquiring new customers.
Sales of products for amusement use decreased compared with the previous fiscal year due
to the decline in sales of game equipment.

61. (4)Streamlining business operations■Plan(September 30, 2015 release)① Downsizing of domestic production sites• Stop production of 2 factories in Gunma prefecture by the end of September 2016.
• Transfer products to domestic and overseas group factories accordingly.
• Implement employee relocation and voluntary retirement programs.

② Voluntary retirement program• Eligibility: An employee who is at least age 40 with 3 or more years of service• Availability: For around 200 employees (Number of applicants: 247employees)■Results(At the end of September, 2016)
・ Completed both the downsizing of production sites and a voluntary retirement program.
・ Improved profitability by enhancing factory operation efficiency in the entire domesticfactory.
71. (5)Streamlining business operations■Profit improvements through streamlining measures（Comparison of status before and after the streamlining）
FY2015（Hundred Millions of Yen）

FY2016

3Q(Results)

4Q(Results)

FY(Results)

1Q(Results)

2Q(Results)

1H(Results)

FY(Forecast)

Reduction in labor
costs

－2.6

2.6

3.4

3.6

7.0

15.0

Reduction in
depreciation expenses

1.4

1.4

2.8

1.1

1.1

2.2

4.4

Others(incl. additional costs）

▲0.0

▲0.6

▲0.7

▲1.3

▲1.3

▲2.6

▲3.8

1.4

3.4

4.8

3.1

3.4

6.6

15.6

Total••

Delivered cost-effectiveness of 6.6 hundred million yen in the first half of this fiscal year bystreamlining business operations mainly in the labor cost reduction.
The cost-effectiveness of 15.6 hundred million yen is expected in the full year by completingthe streamlining by the end of September.

81. (6)Financial Results by region（Hundred Millions of Yen）

1H FY2015(Results)
Sales

1H FY2016(Results)

OperatingincomeSales

YoY Change

OperatingincomeSales

Operatingincome

Japan

228

▲1.2235

6.3+7+7.5

China

112

▲1.3104

3.0-8+4.3

Southeast Asia

77

▲0.5781.3+1+1.8Europe andNorth America260.827

1.2+1+0.4Total445▲2.3446

12.0+1+14.3

Adjustment▲85▲2.6▲88▲3.4-3-0.8

Consolidated359▲5.0357

8.6-2+13.6•Profitability in Japan was improved by streamlining business operations and overseas
profitability by reducing fixed costs and improving manufacturing yield, achieving to havea surplus in the entire region.

9

1. (7)Consolidated Financial Results(Forecast)（Millions of Yen）

FY2015(Results)

FY2016(Forecast)

YoY
ChangeYoY%

73,09877,000+3,901+5.3%

Operating income381

2,500+2,118 +555.1%

Ordinary income▲628

2,100+2,728－

Profit attributableto owners of parent▲8,1221,600+9,722－

Exchange rate(USD)

121.04115.00-6.04

Sales•-5.0%

The forecast for annual results remains unchanged from the initial plan.
102. Progress of Medium-TermManagement plan11

2. (1)Summary-Medium-Term Management plan

■Our Medium-Term strategy◆ A growing CMK to deliver sustainable growth bytransforming our solid business strategy◆Getting an advantage to better compete in the automotivePWB market■Key objectives◆Increase sales in the market for products for automotiveand communication devices.
Growth in the overseas market.
◆Enhance production capacity◆Strengthen cost competitiveness◆Enhance quality management122. (2)Sales of products for automotive use•

900

Orders increased steadily since themedium-term business plan madein May 2015, reflecting our efforts
focused on the sales expansion ofproducts for automotive use.

900
870

700

90%

805

800

726 710737 730

770

Others520 435600

382

252 228
279 222

242

500

300

100

080%

70%
68.8% 68.6%

68.7%400200

•100%

65.8%
61.6%

60%

Ratio of car electronics sales

Sales of products for automotive
use increased, helped by theadvantages of our long-termbusiness experience withcustomers, product quality andsupport system.

1,000

Sales(Hundred Millions of Yen)•

After the financial crisis in 2008
(Lehman shock), our sales
decreased in the area of consumer
products such as AV digitalequipment and communications
device due to the offshore
production shift of our customers
and the rise of East Asiancompetitors.

Car electronics

380

435 423528
488 485 502
447

52.5%

50%

50.0%
42.2%

Ratio of Car electronics salesFY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016(plan)

40%
132. (3)Prospect for automotive PWB market■Spread of ADAS••

In the advanced driver assistancesystem, millimeter wave radar andcamera are installed.
The ADAS related market is
expected to grow rapidly towards
2020, increasing the demand forautomotive PWB as well.
Sales of the ADAS related products
increased, reflecting our focus on themarket.

83.0%
Ratio of ADAS installed vehicles of new car sales•

100.0%

79.5%

80.0%

84.9%
81.6%

70.9%
60.8%

60.0%

53.9%

39.3%

Japan

35.4%

40.0% 33.7%

38.2% 39.6% 40.4%

41.5%

30.0%
22.8%
20.0%
W/W

11.9%

16.0%

0.0%
2015 2016 2018 2020 2022 2024 2026 2028 2030

JapanEU

NAFTA

China

Others

W/W※The installation ratio shows the ratio of the number of ADAS installed vehicles to the number of sales of new cars in each region(excluding autonomous cars of Leve 3 and over).
The source: “Best Candidate Prediction of Next Generation Car Technologies 2016” Fuji Chimera Research Institute Inc.

14

2. (4)Prospect for automotive PWB market■Spread of new generation vehicles (HV/PHV/EV/FCV)• The new generation vehicles are expected to be more popular in response to theenvironmental regulations.
• The demand for automotive PWB is expected to grow further, as more PWB areused in a single vehicle compared to the conventional vehicle.

＜Number of sales of the next generation vehicles・sales ratio＞ (Unit: Thousand)2015(Results)

2020(Forecast)

2030(Forecast)

Numberof sales

Sales ratio

Numberof sales

Sales ratio

Numberof sales

Sales ratio

Japan950

18.8%

1,380

26.2%

3,050

58.4%

EU1300.8%

440

2.8%

10,070

63.7%

NAFTA

510

2.4%

1,250

5.9%

11,250

49.8%

China

200

0.8%

600

1.9%

10,380

18.9%

Others

50

0.2%

410

1.6%

1,910

4.6%

W/W

1,840

2.1%

4,080

4.1%

36,66026.2%

Country※The sales ratio shows the ratio of the number of sales of the next generation vehicles to the number of sales of new cars in each region.
The source: “Best Candidate Prediction of Next Generation Car Technologies 2016” Fuji Chimera Research Institute Inc.

15

2. (5)Strengthen cost competitiveness■Downsizing of domestic
production sites•
•

•

•

•

Domestic production sites were downsized from
3 to 2 by streamlining business operations.
Per-capita sales increased compared to thestatus before the downsizing, which improved
our profitability.
In addition, the status of domestic sales orders
is gradually recovering, helped by the increased
demand for the ADAS related products and theexpanded business with the existing customers.
As a result, domestic profitability was improved
significantly, keeping a high operating rate atdomestic production sites.
In future, we will make investments for theautomated production to enhance productivity,
aiming at further improvement of ourprofitability.

Per capita sales at domestic production sites(Index)1501251007550

FY2014FY2015※Index setting FY2014 as 100

1H FY201616

2. (6)Enhance production capacity■Further enhancement of production capacity in the factory ofThailand•

By September 2016, our product capacity had been enhanced by 30% from the year-end of2015.
• However, as the demand for automotive products is expected to increase in future, ourproduction capacity needs to be enhanced further.
• In view of the above, we will enhance our production capacity further by 30% by 2018.
（It will increase by 66% compared to the year-end of 2015)• The enhancement is expected to contribute to increasing our sales and profits in the next fiscalyear.

CMK CORPORATION(THAILAND) CO., LTD.
Business Contents
Build-up PWBs
Multilayered PWBs
Double-sided PWBs

The Certification ofISO9001/14001 TS16949

172. (7)Consolidated Financial Results（Hundred Millions of Yen）

Medium-Termmanagement(May 25, 2015 release)

Results and Forecast(As of November 25 , 2016)

FY2015 FY2016 FY2018FY2015
FY2016FY2018(Results) (Forecast) (Forecast)

Sales

750820900

730770900

Operating income

15254532545

2.0％

3.0％

5.0％

0.5％

3.2％

5.0％

71630

▲811630

1.2％

2.9％

5.0％

-15.9％

3.4％

6.1％

OperatingmarginProfit attributableto owners of parent

ROE※Assumed exchange rate：1USD…115yen, 1EUR…125yen18

3. Supplementary material on
financial results193. (1)Sales by application（Hundred Millions of Yen）

FY2015(Results)

FY2016(Forecast)
1H
2H
FY(Results) (Forecast) (Forecast)

1H

2H

FY

Car electronics

240261502253

275

528

Mobilecommunications

151127132134

AV equipment

541031216

Digital still camera

131225111224

Amusement

1592481624

Others

68

71

14067

74

142359371730357

412770Total

20

3. (2)Sales by type of PWB（Hundred Millions of Yen）

FY2015(Results)
1H

2H

FY2016(Forecast)
FY

1H
2H
FY(Results) (Forecast) (Forecast)

72

69

141

6966

136

Multilayered PWBs

140

155

296

152

193

346

Double-sided PWBs

105

101207101

114

215

414486343772359

371730

357

412

770

Build-up PWBs

OthersTotal213. (3)Financial Results by region（Hundred Millions of Yen）

FY2015(Results)

Sales

OperatingincomeFY2016(Forecast)

Sales

OperatingincomeYoY
ChangeSales

Operatingincome

Japan

467

6.646815.7+1+9.1

China

225

▲0.9236

9.4+11+10.3

Southeast Asia

160

0.0206

4.5+46+4.5

Europe andNorth America55

2.359

2.2+4-0.1

Total

908

8.197031.8+62+23.7

Adjustment▲177▲4.3 ▲200▲6.8-23-2.5

Consolidated730

25.0+40+21.2

3.8770223. (4)Capital investment（Hundred Millions of Yen）

FY2015(Results)
1H

2H

FY2016(Forecast)
FY

1H
2H
FY(Results) (Forecast) (Forecast)

Japan741213922

Overseas81018102030

Consolidated

151531242953

Depreciation
cost

26

2249

2125

4623

Future-related information and descriptions in this material are justforward-looking statements and not guarantees for futureachievements.
(Amounts are rounded, and % is rounded to one decimal place.)

END24