CMK CORPORATION
Securities Cord No : 6958

Creating the future2020 Business Report
Year Ended March 31, 2020

Financial Highlights

POINT・ ‌Net sales decreased due to factors including the lower sales of products designed for automotive use that
resulted from a slowdown in the global market for such products.
・ ‌Operating income fell, reflecting causes such as a net sales drop and a lower operating rate for manufacturing
plants in Japan.

▌Net sales(Millions Yen)
100,000

86,89480,000▌Operating income

HDI PWBs
Double-sided PWBs

26,941

90,23026,246

Multilayered PWBs
Others

3,767

82,61921,3753,000

60,00040,00020,000037,044

41,78442,401

15,27014,861

7,637

7,339

5,747

FY 2018

FY 2019

FY 2020(Millions Yen)
60,00055,892

55,84913,0940

55.5

FY 2018

FY 2019

FY 2020▌Cash dividends

Equity ratio

54,932

（%）
60

(Yen)
12.0
10.0

53.6

40,000

1,601

1,500

▌Net assets／Equity ratio
Net assets(Millions Yen)
4,500
4,266

50

10.0

11.0

8.0

49.9

6.0

6.0
20,000

40

4.0
2.0

0

1

FY 2018

FY 2019

FY 202030

0FY 2018

FY 2019

FY 2020

Message from the President

I would like to take this opportunity to express my gratitude
to our shareholders for the consistent support they haveshown us over the years. It is my pleasure to present theoperating results for the 59th fiscal year (from April 1, 2019 toMarch 31, 2020).
I ask for your continued understanding and further support in
the years to come.
June 2020

Isao Osawa

President and CEO

Financial Results for the Fiscal Year Ended
March 31, 2020
During the fiscal year under review, the Japanese economy
showed a decelerating trend, including an export slump,
although consumer spending recovered slowly withimprovements in the employment environment and otherfactors in the background. In the global economy, the UnitedStates and China showed signs of business slowdown,
reflecting factors, such as the adverse effects of the U.S.-China
trade friction. Uncertainty increased in the global economy asa result of the slowdown and other developments, including
intensified geopolitical risks in the Middle East.
In addition, the spread of COVID-19 stagnated economic
activities in certain countries, increasing concerns about aglobal economic slowdown.
Under those conditions, the reliance of automobiles onelectronics rose in the market for printed wiring boards(PWBs), a main operating field for CMK Corporation and its
consolidated subsidiaries (the“CMK Group”). However, unit
sales of automobiles decreased worldwide, making businessconditions difficult for the Group.
Consolidated net sales for the CMK Group amounted to¥82,619 million (down 8.4% year on year), reflecting lower
sales for mobile communications, amusement and otherproducts, in addition to the decline in automotive PWB sales.
Operating income totaled ¥1,601 million (down 57.5% year
on year), under the adverse effects of factors such as the sales
drop and a lower operating rate for manufacturing plants inJapan. Ordinary income amounted to ¥792 million (down
79.0% year on year), reflecting developments, including theoperating income decline. Loss attributable to owners ofparent was ¥1,128 million (compared with profit attributableto owners of parent of ¥2,015 million posted in the previous
fiscal year), mainly due to income taxes – deferred posted inconnection with the reversal of deferred tax assets.

2

satisfaction and create more rewarding working environment

Future Outlook

as its Medium- and Long-Term Vision. Based on the Vision, theGroup will work to make employees happy and help them

The global spread of COVID-19 significantly restrictedeconomic activities in certain countries, making the future
outlook for Japanese and global economies extremely
uncertain. The car electronics market, a key operating area for
the CMK Group, has also fallen into severe business conditions
never before experienced by the Group as a result of changes,
including sharp declines in automobile production and sales.
Meanwhile, in the automotive PWB market, demand is
expected to expand with greater automobile reliance onelectronics in the medium term, with structural changes causedby new CASE (Connected, Autonomous, Shared & Services, andElectric) trends, including shifts toward automation,
electrification and connected cars, in the background.
Under those circumstances, the CMK Group adopted
changing our business structure to promote customer

grow, in addition to meeting the expectations of stakeholders,by providing our products with global level of reliability tosociety, focusing on products in automotive powertrain, driving
control and safety areas where the Group has strengths,
including engines, brakes, and safety as well as otherpreventive devices for which high quality and reliability are
required.
To sustain its growth after COVID-19 and the recovery of
economic activities worldwide, the CMK Group will prioritize
promoting structural reforms and improvement in the quality ofGroup companies adopted in the Medium-Term Management
Plan, make all possible efforts to raise the value of Group
companies, and continue stable dividends as a way to return
profits to shareholders. The Group asks all shareholders fortheir understanding and support.

■Proposing PWBs with high functionality and reliability with automation, electrification and connected cars as key words

For Power Electronics Applications
CMK-COMP series of PWBs for high heatdissipation and high current◦‌The series offers PWBs high in heatdissipation performance.
◦‌The series solves problems from heatgenerated by mounted components.
◦‌The series meets high current requirements
using heavy copper PWBs.
3

Copper-based PWB

For Automotive Sensor Applications
High frequency-compatible PWBs◦‌These PWBs use high accuracy,
79GHz-band sensors.
◦‌These products meet therequirements for integrating anantenna and a controller.

High frequency-compatible PWBConsolidated Financial Statements

Consolidated Balance Sheet

Thousands of
U.S.Dollars

Millions of Yen

FY2020FY2019Consolidated Statement of Income

FY2020

FY2020Current assets

48,66561,066 $445,446

Non-current assets

47,34944,072433,400

Property, plant and equipment

41,05237,503375,762

337

339

3,084

5,959

6,228

54,544

29

50

265

96,044105,189

879,121

Intangible assets
Investments and other assets
Deferred assets
Total assets
Liabilities
Current liabilities

21,091

25,917

193,052

Non-current liabilities

20,02023,422

183,249

Total liabilities

41,111

49,340376,302

Net assets
Shareholders' equity

48,47150,251

443,670

Share capital

22,30622,306204,173

Capital surplus

16,628

16,628152,201

Retained earnings

12,671

14,451

115,981

Treasury shares(3,135)(3,134)(28,695)

Accumulated othercomprehensive income

2,979

2,208

27,267

Non-controlling interests

3,480

3,389

31,853

Total net assets

54,932

55,849502,810

Total liabilities and net assets

96,044105,189

879,121

FY2019FY2020For the year
For the year
For the year
ended
ended
ended
March31,2020 March31,2019 March31,2020

As of
As of
As of
March, 2020 March, 2019 March, 2020

AssetsThousands of
U.S.Dollars

Millions of Yen

Net sales

82,61990,230 $756,237

Cost of sales

71,67877,180656,091

Gross profit

10,941

13,050100,146

Selling, general andadministrativee expenses

9,340

9,283

85,491

Operating profit

1,601

3,767

14,654Non-operating income

476

633

4,356

Non-operating expenses

1,285

630

11,762

Ordinary profit

792

3,770

7,249

Extraordinary income

17

207

155

Extraordinary losses

232

1,005

2,123

Profit before income taxes

577

2,972

5,281

Income taxes - current

565

602

5,171

Income taxes for prior periods

50

222

457

Income taxes - deferred

788

(101)

7,212

Profit (loss)

(826)

2,249

(7,560)

Profit attributable to noncontrolling interests

301

233

2,755

Profit (loss) attributable toowners of parent(1,128)2,015(10,324)

4

Sales by application

AV equipment

1.1％

Others

14.3％

Digital still camera

1.6％

FY 2020

Mobilecommunications

1.1％

Amusement

0.3％

FY 20195

Car electronics

81.6％

FY 2019

FY 2020

Change■ Car electronics

76.7％

81.6％

4.9％

■ Amusement

1.6％

0.3％

△1.3％

■ Mobile communications

2.3％

1.1％

△1.2％

■ Digital still camera

1.9％

1.6％

△0.3％

■ AV equipment

1.3％

1.1％

△0.2％

■ Others

16.2％

14.3％

△1.9％

TOPICS

Introduction of a new personnel system
CMK Corporation “CMK”() introduced a new personnel system in April 2020. This system aims to accomplish threegoals—achieving fairness in personnel affairs, realizing a more rewarding working environment and evaluating employees
who are working hard and achieving success. CMK will work to keep its junior and senior employees highly motivatedand be capable of meeting violent changes in business conditions by shifting to a job-based salary system.
Shifting from a seniority-based salarysystem to a job-based one

Establishing an executive positionbased promotion system

Extending the retirement age to 65

Realizing a personnel system that rewards
employees working hard and achieving successregardless of their age, gender or nationality

Aimed at revitalizing organizations by training
and selecting next-generation manager
candidates at an early stage

Shifting from hiring senior employees from awelfare viewpoint to their practical use ascapable force

Initiatives for addressing COVID-19

Initiatives for developing new products

CMK has been taking measures based on Japanese
governmental policies, attaching top priority to the safety
and security of customers, employees, stakeholders andthe like from the viewpoint of preventing the spread of
COVID-19.
In addition, CMK donated 12,000 face masks to Xiegang
Town, Dongguan City, China, through its overseas affiliate
in February 2020. CMK also contributed to a charitable
institution in Wuxi City in March 2020 toward thepurchase of disease control supplies.

CMK is actively developing new products, including thosethat are compatible with the Advanced Driver Assistance
System (ADAS), automated driving, electrification and thefifth generation mobile network (5G).

High-current PWB units
These PWB units are designed to handle anelectric current of 1kA or higher in response to ashift toward high currents.
Electrification is expected to accelerate. CMK is
working on making its products compatible with
unprecedented high currents to address theelectrification of power units for drones, flying
automobiles, electric planes and the like.

Coil PWBs for motors
These are coil PWBs for brushless motors
under joint research with a university.
CMK is advancing their research, believing thatthey can contribute to solving the future issuesof downsizing electric motors, reducing theirweights and enhancing their efficiency.

Donation of face masks

Ceremony for presenting a letter of thanks
for the contribution madeIn addition, CMK offers a broad range of related
products, including products to which high-reliability
Modified Semi-Additive Process (MSAP) technologies
supporting ADAS technologies are applied, rigid flexible
PWBs compatible with higher density, and the CMK-COMP
series of products for high heat dissipation.
6

Operating Results by Region■Sales by region

Europe & North America
China

18%
Southeast Asia

18%

7

Japan

57%

7%

Sales Japan¥47,216million(Down 8.4% year on year)¥21million

Operating loss(Operating income of ¥1,961 million was posted
for the segment in the previous fiscal year.)¥14,891million

Sales
China



(Down 11.3% year on year)

Operating income ¥1,904million(Operating income of ¥1,620 million was posted
for the segment in the previous fiscal year.)

Sales
Southeast
Asia





¥14,676million(Down 1.2% year on year)¥15million

Operating loss (Operating income of ¥273 million was posted
for the segment in the previous fiscal year.)

Europe&North
America

Sales


¥5,835million(Down 17.4% year on year)

Operating income¥313million

 (Operating income of ¥409 million was posted
for the segment in the previous fiscal year.)

Overview for the fiscal year

Sales for automotive products stayed at the same level as the previous fiscal
year, reflecting increased automobile reliance on electronics. Net sales, however,amounted to ¥47,216 million (down 8.4% year on year), due mainly to material
supply delays associated with supply chain disruption caused by Typhoon No. 19
and a production decrease that resulted from the delays, in addition to lower
sales for mobile communications and amusement products. Looking at profits,
operating loss for the segment totaled ¥21 million (compared with operating
income of ¥1,961 million posted in the previous fiscal year), reflecting factors
such as the net sales fall and a lower operating rate for manufacturing plants.

Overview for the fiscal year

Automotive product sales dropped under the adverse
effects of the automobile sales decrease in China. Sales
also plunged for products for amusement use. As a result,net sales for the segment was ¥14,891 million (down
11.3% year on year). Looking at profits, operating income
amounted to ¥1,904 million (up 17.5% year on year), due
to factors including productivity improvement and thedepreciation of the renminbi against the U.S. dollar.

Overview for the fiscal year

CMK’s automotive product sales decreased mainly due tosluggish automobile sales in Thailand including exports. As
a result, net sales for the segment amounted to ¥14,676
million (down 1.2% year on year). Looking at profits, theoperating loss came to ¥15 million (compared with
operating income of ¥273 million posted in the previous
fiscal year), reflecting a heavy cost burden associated withinvestments to increase production in Thailand.

Overview for the fiscal year

CMK’s automotive product sales sank chiefly because ofsluggish unit sales of automobiles in the United States. As aresult, net sales for the segment totaled ¥5,835 million(down 17.4% year on year). Looking at profits, operating
income amounted to ¥313 million (down 23.4% year onyear), as a result of the net sales decline.

8

Corporate Data (As of March 31, 2020)

Name of listed company CMK CORPORATION(Securities code no.: 6958)
Date of establishment

February 25, 1961

Capital¥22,306,203,140

Number of employees

1,243 (Group total 4,851)

Primary Consolidated Subsidiaries (As of April 1, 2020)▌Japan● CMK Products Corporation▌Overseas (As of August 1, 2020)

Executives (as of August 1, 2020)
Board of Directors
President and CEO
Executive Director and
CCO● CMK ASIA (PTE.) LTD.
Executive Officers

Isao Osawa

Masayoshi Hagiwara● CMK CORPORATION (THAILAND) CO.,LTD.

Akira Kurosawa

Executive
Officer

Kouichi Amimoto● CMKC (HK) LIMITED

Yoshiaki Ishizaka● CMKC (SHENZHEN). LTD.

Hiroshi Hanaoka

Executive
Officer

Director and Executive
Officer

Takahiro Shirai

Executive
Officer

Masanori Kawashima

Director

Tsuyoshi Ukyo

Executive
Officer

Masaya Kuriyama

Director

Rika Sato

Executive
Officer

Seiichi Kobayashi

Director

Mitsuru Kaitoh

Executive
Officer

Yasuhiko Takahashi

Board of Corporate Auditors

Executive
Officer

Toshikazu Fujino

Standing Corporate
AuditorMasashi Koike

Executive
Officer

Yoshihisa Yamaguchi

Corporate Auditor

Yukio Otaka

Corporate Auditor

Akihiro Kakizaki

Director and Executive
Officer

Our Website■ PRODUCT■ IR INFO■ COMPANY■ CSR■ RECRUIT■ TOPICS

We disclose detailed information on this website.

9● CMKM SDN.BHD.

SeniorExecutive
Officer● CMKC (DONG GUAN) LTD.
● CMK ELECTRONICS (WUXI) CO., LTD.
● CMK EUROPE N.V.
● CMK AMERICA CORPORATION

Stock Information (As of March 31, 2020)

Total number of shares authorized
Total number of shares issued and outstanding

227,922,000

Major shareholders (10 largest)

63,060,164

Shareholders

7,104

Number of shareholders

100

Share trading unit
Shareholder Breakdown【Total 63,060,164shares】
Individuals and others

15,919thousand shares（25.2%）

Financial

22,182thousand shares（35.2%）

Securities ﬁrms

666thousand shares（1.0%） Foreign companies and individuals

7,984thousand shares（12.7%）
Other ﬁrms

Number of shares held Percentage(thousands)(%)

Kyoden Area Net KK

4,638

7.8

The Master Trust Bank of Japan, Ltd. (Trust account)

3,953

6.6

Takahiro Nakayama

2,975

5.0

Mizuho Bank, LTD.

2,576

4.3

The Foundation for Technology Promotion of Electronic Circuit Board

2,500

4.2

Japan Trustee Services Bank, Ltd.（Trust account 9）

2,275

3.8

Japan Trustee Services Bank, Ltd. (Trust account)

2,040

3.4

The Dai-ichi Life Insurance Company, Limited

1,895

3.2

Akiharu Nakayama

1,891

3.1

Hiroshi Hashimoto

1,890

3.1

Note:1．
‌Although the Company holds 3,864,028 shares of treasury stock, it is notincluded in the above list of major shareholders.
‌Treasury shares were excluded in calculating the shareholding ratios.
2．

16,307thousand shares（25.9%）

Shareholders Memo
Fiscal year:

April 1 through March 31of the following year

Regular general
meeting ofshareholders:

Held in June each year

Date of record for March 31
end-of-year
dividends:
Date of record for September 30
mid-yeardividends:

Notification
method:Electronic notification(company website athttps://www.cmk-corp.com).
If notification cannot be madeelectronically, it will be made using
the Nihon Keizai Shimbun.

Transfer agent:Mizuho Trust & Banking Co., Ltd.
1-2-1, Yaesu, Chuo-ku, Tokyo, Japan
Stock Transfer Agency Bussiness
Planning Department

Contact address:

Mizuho Trust & Banking Co., Ltd.
8-4 Izumi 2-chome, Suginami-ku,
Tokyo 168-8507
0120-288-324

1043rd Floor, Shinjuku I-Land Tower Bldg., 6-5-1
Nishi-Shinjuku, Shinjuku-ku, Tokyo 163-1388, Japan
Tel.: +81-3-5323-0231 (main)
https://www.cmk-corp.com