IR Briefing for 1Q
Fiscal Year ending March 2017

October 2016
Inabata & Co., Ltd.
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1

Contents
P.3-

Summary of the Company

P.11- Medium-Term Management Plan
“New Challenge 2016”– Forecast for the final year (FY3/2017)
P.25- Corporate Governance

P.29- Returning Profits to Shareholders
P.32- Summary of Financial Results – 1Q FY3/2017
P.41- Summary of Financial Results – FY3/2016

P.45- Reference* In this document, Net income = Net income attributable to owners of parent

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Summary of the Company
About Inabata:
1. Founded in 1890
Founded in Kyoto in 1890 as Inabata Senryoten – animporter of dyestuffs
The business was later expanded, with the focus on
chemicals

Inabata Dye Shop
(Nishijin, Kyoto)

Asia

EuropeThe Americas
China Japan

2. A globally expanding, multi-faceted
trading company

India

SE Asia

Around 60 locations deployed across 18 countries
Business functions include market development; manufacturing &processing; logistics; finance etc.
Planning and proposals based on expertise and know-how of products
and markets
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Summary of the Company
3. 5 Business Segments
Operating in 5 segments:Information & Electronics; Chemicals;Life Industry; Plastics; and Housing & Eco Materials
Housing &Life Eco Materials
Industry 4%

7%
Chemicals

8%

FY 3/16
Sales Results
577.0 billion
JPY

Plastics
44%

Information &Electronics

37%

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Inabata’s Business Spheres
Operating in 5 business segments at about 60 locations, throughout Japan and
18 countries overseas

Inabata GroupJapan

25 bases of operation in 9
countries, including Singapore
and Thailand

25 bases of operation in 2
countries - China &South Korea

5 Areas of Business:

Southeast
Asia

Information & Electronics

ChemicalsLife Industry
Plastics

Northeast
Asia

Housing & Eco Materials

5 bases of operation in 4
countries, including UK& France

EuropeThe
Americas(NB) No. of overseas countries and operation bases valid as of 1 July 2016
(NB) No. of operation bases includes bona fide Inabata & Co., Ltd. affiliates

10 bases of operationin 3 countries,
including USA &Mexico5
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Inabata’s Wide Range of Capabilities
Highly specialized people
empowered with cutting edge information

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Inabata’s Strengths [Manufacturing and Processing]Our strategy involves expanding our trading business by swiftly grasping with information regarding
development of new products and market trends by drawing on our worldwide processing bases and trading
company offices.
Plastics compounds: Formed by adding flame
retardants and other additives to raw plastic

Compounding
facility

Plastics
manufacturer
Proposal

Information

Collaboration

Component
manufacturer
Information

Product
manufacturer
ProposalInquiries on plastics andcoating materials

Information onmaterials

Tradingcompany office

Expanding trading businessby leveraging ourmanufacturing capabilities

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Inabata’s Strengths [Plastic Compounding Facilities]
China

Plastics Compound
Business Office(2 sites)
51,600 MT/Y

(Japan)・Shares information
・Coordination of facilities and raw
materials
・Reduces costs by purchasing inbulk

Vietnam
36,000 MT/Y

Philippines

Thailand
38,400 MT/Y

10,800 MT/Y
Building and dismantling of plants in line with customers’ relocation strategy
Providing consistent quality of service, anywhere.

Malaysia
21,600 MT/Y

Indonesia
37,200 MT/Y
205,800 MT/Y: 8 sites in 7 countries (as of April. 1, 2016)

Mexico10,200 MT/Y
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Consolidated Financial Results:Trends Over the Past 15 Years(Op. Income:billion JPY)

(Sales:billion JPY)

700.0

Sales
Op.IncomeNet Income for the Period

600.0

10.9
10.7

500.0

500.0

466.0

423.3

400.0

469.0 464.4
442.7
410.7

369.7

7.6

7.2

331.7

300.0 270.2 288.9

7.9

561.1
479.9

6.2

11.3 11.5 12.0

590.0
577.0
572.1

9.5

10.0

9.0

8.6 8.6

8.0

7.7

6.6

6.0

5.5
4.0

200.0

100.0

1.7

2.0

0.0

0.0

3/02 3/03 3/04 3/05 3/06 3/07 3/08 3/09 3/10 3/11 3/12 3/13 3/14 3/15 3/16 3/17
(Forecast)

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Overseas Sales & Operating Income:Trends Over the Past 15 Years
Overseas Sales(Sales:billion JPY)

350.0

Overseas Op. Income(Op. Income:billion JPY)

7.5

Overseas results have quadrupled in the last 15 years

300.0

284.3

294.0

305.4

6.1
250.0
200.0

170.9

159.3 152.2

150.5

150.0

186.5 186.7

185.0

4.2

5.0

211.6

5.1
4.9

3.7 3.9

110.2
100.0

67.7 72.4

2.5

84.1

2.0

50.0
0.0

0.0

3/02 3/03 3/04 3/05 3/06 3/07 3/08 3/09 3/10 3/11 3/12 3/13 3/14 3/15 3/16
JPY:USD
Exchange
Rates

131.9

119.9

107.1

104.2

118.0

119.1

114.1

(NB) The figures do not include the exports from Japan.

91.0

92.1

81.49

77.74

79.81

100.17 109.76 120.15

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3 Year Medium-Term Management Plan
“New Challenge 2016”
Forecast for the Final Year (FY3/2017)11
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Medium-Term Management Plan “New Challenge 2016” –Quantitative Targets

Medium-Term Management Plan Targets (FY 3/2017)

Sales: 620 billion JPY
Op. Income: 12.5 billion JPY
Current Profit : 13.5 billion JPY
Net Income: 10 billion JPY
ROE: 8.2％Net D/E Ratio : 0.45 X or less(※)
Net Worth Equity Ratio : 38.0％
Assumed Exchange Rate: 1USD=100 JPY(※) Net D/E Ratio = (Int. Bearing Debt – Cash & Deposits) / Equity Capital
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“New Challenge 2016” – The 6 Key Initiatives
1. Further expansion and build-up of overseas operations• Further expansion and build-up of core Asian operations• Increasing involvement in emerging countries outside Asia
• Expansion in trade with non-Japanese companies

2. Focus on markets with growth potential and sectors thathave yet to be developed• Focus on the automotive sector; the environment & energy sector; andthe life science sector• Steady diversification of income by expanding into new merchandiseand making new business partners
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“New Challenge 2016” – The 6 Key Initiatives
3. Development and expansion of global management
infrastructure••

Development of risk management and business management techniques to support global
management
Promotion of global standardization in information systems and business processes

4. Investment aimed at future growth• 10 billion JPY earmarked for investment over the next 3 years

5. Strengthen financial position and seek further capital andasset efficiencies

6. On-going development of international-minded humanresources
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“New Challenge 2016” – Forecast for the Final FY(Profit:billion JPY)
(Sales:billion JPY)

15.0

12.4

9.6

10.0

8.8
7.6
6.2
5.0

7.7
6.6

464.4

479.9

FY 3/12FY 3/13

10.9

13.5

13.2
12.2
11.3

10.7

9.5

8.6

8.6

561.1

572.1

577.0

12.5

11.5

12.5
10.0

9.0

590.0

Sales
Op Income

620.0

Current Profit
Net Income

0.0
JPY/USD ¥77.74¥79.81

IK2013

FY 3/14

FY 3/15FY 3/16¥100.17¥109.76¥120.15FY 3/17(Forecast)¥110.00

FY 3/17(Target)¥100.00

New Challenge2016(NB) Net income for FY 3/16 includes 0.8 billion JPY from gains made on the disposal of securities held for investment purposes.

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Trends in Key Management Indicators

FY3/12

FY3/13

FY3/14

FY3/15

FY3/16

FY3/17(Result)(Result)(Result)(Result)(Result)（Target）

Equityratio(%)

30.7

35.3

37.7

39.1

41.3

38.0

ROE

8.5

7.6

8.1

7.1

7.5

8.2

0.82

0.50

0.46

0.43

0.37

0.45

(%)

Net D/E
Ratio

IK2013

New Challenge2016(NB) Net D/E Ratio = (Int. Bearing Debt – Cash & Deposits) / Equity Capital

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Final Year of “New Challenge 2016” – Forecasts and Divergence from Medium-Term Management
Plan Targets

Sales (consolidated)【Sales】(billion JPY)

700.0

577.0
0.1
24.8

600.0

590.0
0.1
27.0

－30.0 620.0

29.0 0.1

500.0

251.1

400.0
300.0

200.0
100.0
0.0

¥/USD

250.0

260.5

41.0
48.1

42.0
50.0

46.0
53.0

211.6

220.9

231.4

¥120.15¥110.00¥100.00

FY3/16(Result)

FY3/17(Forecast)

FY3/17(Target)

New Challenge2016(NB) From FY 3/17, crane business previously classified under “Other” is classified under “Information & Electronics.”
Segment information for FY 3/16 has been prepared on the basis of the new classifications.

FY 3/17
Forecasts and divergence from
Medium-Term Management
Plan targets
–30.0
Other

0
－2.0

Housing &Eco Mat.
Plastics－10.5Life Industry－4.0

Chemicals－3.0

Information & －10.5
Electronics
Plastics business remained solidin general but declined due todownturn in unit sales pricing
triggered by lower oil prices.
Information & Electronics fell
due to sluggish performance in
LCD-related business.
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Final Year of “New Challenge 2016” – Forecasts and Divergence from Medium-Term Management
Plan Targets

Operating Income (consolidated)【Op. Income】(billion JPY)

14.00
12.00

－1.0

11.37
0.42

11.50
0.14

0.40

0.10

10.00
8.00
6.00

12.50
0.50 0.10

Other

4.00

4.43

0

Housing &Eco Mat.
Plastics

－0.1

2.00

Life Industry

－0.2

1.00

Chemicals+ 0.1

Information &Electronics

－1.4

4.60

1.52

1.80

4.00

1.01

1.10

2.00

3.83

3.50

¥/USD ¥120.15¥110.00¥100.00

FY3/16

FY3/17

FY3/17(Result)(Forecast)(Target)0.00

FY 3/17
Forecasts and divergence from
Medium-Term Management
Plan targets
–1.0

+ 0.6

4.90

(NB) From FY 3/17, crane business previously classified under “Other” is classified under “Information & Electronics.”
Segment information for FY 3/16 has been prepared on the basis of the new classifications.
(NB) FY3/17(Forecast) is updated to the forecast as of November 30, 2016.

Information & Electronics was
significantly lower due tosluggish performance in LCDrelated business,

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[Key Initiative 2. Focus on markets with growth potential and sectors that have yet to be developed (1)]•Focus on the automotive sector; the environment & energy sector; and thelife science sector

Initiatives in the automotive sector
 FY 3/17 forecasts and divergence from Medium-Term
Management Plan targets
 Sales Results for the Automotive Sector
Plastics: –6.0; Chemicals and other: +0.4
(billion JPY)

60.0

Plastics

Chemicals and Other＋0.4 7.3
40.0

7.7[Main factors](+) Growth of sales in China(–) Downturn in unit sales prices(–) Slowdown in Southeast Asian emerging economies(–) Delays in Mexican compounding business

6.6
－ 6.0
20.0

36.0

42.0

27.2

0.0

FY 3/16(Results)

FY 3/17（Forecast）[Strategic focus in FY 3/17]• Expand sales to key global users• Expand sales in Mexico• Raw materials for EV/HV (Chemicals)

FY 3/17（Target）* Sales amounts calculated as simple aggregate totals mainly of automotive sector results.

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[Key Initiative 2. Focus on markets with growth potential and sectors that have yet to be developed (2)]•Focus on the automotive sector; the environment & energy sector; and thelife science sector

Initiatives in the environment & energy sector
 Sales Results
for the Environment & Energy Sector(billion JPY)

20.0

Information& Electronics

Housing & Eco Mat.
and Other

2.6-2.0 4.6

10.0

2.3
13.2

+0.3

12.9

 FY 3/17 forecasts and divergence from Medium-Term
Management Plan targets
Information & Electronics: ＋0.3
Housing & Eco Mat. and Others: －2.0

[Main factors](+) Booming European and U.S. solar cell market(–) Delays in sales of wood chips used for power
generation (Housing & Eco Mat.)[Strategic focus in FY 3/17]• Solar cell-related materials (European operations)• LED heat sink materials

6.7
0.0

FY 3/16(Results)

FY 3/17（Forecast）

FY 3/17（Target）* Sales amounts calculated as simple aggregate totals mainly of environment & energy sector results.

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[Key Initiative 2. Focus on markets with growth potential and sectors that have yet to be developed (3)]•Focus on the automotive sector; the environment & energy sector; and thelife science sector

Initiatives in the Life Science Sector
 FY 3/17 forecasts and divergence from Medium-Term
Management Plan targets
 Sales Results for the Life Science Sector
Life Industry: －1.4; Plastics and Others: －0.5
Life Industry(billion JPY)

Plastics
and Other

15.0
-0.5
10.0

2.0

2.5

2.0

-1.4
5.0

0.0

9.6

9.9

FY 3/16(Results)

FY 3/17（Forecast）

11.3[Main factors](–) Lackluster results of pharmaceuticals-related
business(–) Weak performance of French pharmaceuticalmanufacturing subsidiary[Strategic focus in FY 3/17]• Business related to generic drugs• Revive operations of French pharmaceuticalmanufacturing subsidiary• Field of regenerative medication

FY 3/17（Target）* Sales amounts calculated as simple aggregate totals mainly of life science sector results.

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[Key Initiative 1. Further expansion and build-up of overseas operations]• Increasing involvement in emerging countries outside Asia
First Japanese engineering plastics compound plant in Mexico (to meetdemands from automotive manufacturers)
November 2013:start of operations
September 2014:start of mass production

Launch of operations delayed due to time required to transition from prototype tomass production for automotive
FY 3/2016 sales results of 2,470 tons
⇒ Forging ahead with prototype projects, and expect steadily increasing results
going forward
Estimated to sell 6,500 tons in FY 3/2017
Scheduled to boost annual production capacity to 15,000 tons
Company Name
Production Capacity
Location：IK Plastic Compound Mexico, S.A. de C.V.
：10,200 tons / year
：Silao, Guanajuato Province, Central Mexico
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[Key Initiative 1. Further expansion and build-up of overseas operations ]• Further expansion and build-up of core Asian operations

Plastic compounds plant in the Philippines (to meet OA demand)
Starts commercial production in July 2014
Starts mass production in 2015(compounds used for 2015 model printers)
Launch of operations delayed amid customer delays in relocating production andadverse effects of economic slowdown in emerging nations

FY 3/2016 sales results of 3,240 tons

⇒ Aiming to achieve annual production volume of 8,000 tons by capturing new
business

Company Name:
Production Capacity:
Location:

IK PLASTIC COMPOUND PHILS. INC.
10,800 tons / year
Laguna Province, the Philippines
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[Key Initiative]

Investment aimed at future growth
10 billion JPY earmarked for investment over the 3 yearsof the Medium-Term Management Plan

Cumulative results for investments made over 2
years: 7.8 billion JPY (to FY 3/2016)[Key investment results]
Plastics facilities and land in Indonesia:
Compounding business-related:
Inflation molding business-related:

1.23 billion JPY
1.09 billion JPY
0.74 billion JPY

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Corporate Governance (1)・3 outside directors (of 9 directors)
We aim to enhance supervisory functions and increase corporate value by taking
advantage of the outside directors’ extensive experience and wide-ranging insight
into company business.

Outside Directors
・Mitsunori Takahagi*
Former President & Current Honorary Executive Consultant, - JX
Holdings, Inc.

・Yoshimasa Takao
Former Executive Deputy Chairman & Current Advisor– Sumitomo
Chemical Co., Ltd.

・Katsumi Nakamura*
Former Executive Vice President – Renault (France),
Current Chairman– Calsonic Kansei Corp.
(*) Mr. Mitsunori Takahagi and Mr. Katsumi Nakamura are registered as independent, outside officers with the TSE. 25
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Corporate Governance (2)The following initiatives were implemented to enhance governance

1. Established the Nominating and Remuneration
Committee (voluntary)
Ensures objectivity, fairness and transparency with respect to appointing senior
management, nominating director and audit & supervisory board member
candidates, and making decisions on director remuneration• Current membership: 1 internal director (chairperson) and 2 independent
outside directors• Held twice during FY 3/2016

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Corporate Governance (3)2. Evaluating the board of directors (self-evaluation)
Objective - To increase corporate value by enhancing effectiveness andtransparency of the board of directors✓ In November 2015, performed an evaluation involving all directors
and audit & supervisory board members using a survey format
・An outside consultant was appointed and the direction of self-evaluation measures was
confirmed in interviews with the president and one outside director. Then the content of questions
was determined.
・ A questionnaire was distributed to all directors and corporate auditors and responses wereobtained.

・ The outside consultant collected and analyzed the responses and made a report to the board of
directors.
・ After sufficient verification by the board of directors, the direction of future measures was
decided.

✓ In January 2016, disclosed analysis/evaluation results in writing
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Corporate Governance (4)2. Evaluating the board of directors (self-evaluation)◆ Tasks and measures taken(1) Discussion of medium and long-term themes by the board of directors has been insufficient⇒ Implemented a revision of standards for submissions to the board of directors(Feb. 2016)(2) Feedback of dialog with capital markets to the board of directors has been insufficient⇒ Developed rules for reporting opinions and concerns of investors andshareholders to the board of directors

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Returning Profits to Shareholders (1)Policy for returning profits to shareholders

Total Return Ratio of 30-35% (target)
Total Return Ratio (%) = (amount of dividends + amount of treasury shares acquired) / consolidated net income x 100【 Treasury stock 】●Retirement of treasury shares ●Acquisition of Treasury shares(August 2014)（Details for FY 3/2016）- No. of Shares Retired: 1,660,000

No. of Shares Acquired: 600,000
Value of Shares Acquired: 707,553,600 JPY
Acquisition Period: 10th-24th Feb. 2016(equivalent to 2.55% of the total no. ofshares issued and outstanding prior to
retirement)

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EPS Trends(JPY)

151.91160

137.01 137.20
111.34120

97.45

144.93104.29

80
40

33.22

27.08
(355)

(439)

(604)

(707)

0

(NB) The figures in brackets at the bottom of the bar chart show the amount of treasury shares acquired during the period
30(JPY million).
Copyright © INABATA＆CO., LTD. 2016

Returning Profits to Shareholders (2)Trends in Annual DPS & Shareholder Return Indicators(JPY)

Dividend

40

Dividend Payout Ratio

Total Return Ratio

35

30

36.9%
30

23

26

30.1%
25

23.4%

33

50.0%

36

36
40.0%

31.1%

31.1%

21

30-35％
Target

30.0%

20

15
10

21.5%

10

22.1%

21.9%

24.1%

23.7%

24.8%

20.0%

10
10.0%

5
(355)

(439)

(604)

(707)

0

0.0%
FY 3/09(Result)

FY 3/10(Result)

FY 3/11(Result)

FY 3/12(Result)

FY 3/13(Result)

FY 3/14(Result)

FY 3/15(Result)

FY 3/16(Result)(NB) The figures in brackets at the bottom of the bar chart show the amount of treasury stock acquired during the period (JPY million).
(NB) Figures for FY 3/11 include a special dividend of 2 JPY to commemorate the company’s 120 th anniversary.

FY 3/17(Forecast)
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Summary of Financial Results – 1Q FY3/201732

Consolidated Results Review – 1Q FY3/2017
Sales

：

141.4 billion JPY－3.8％ YoY

Decrease due to adverse effects of strong yen

3.1 billion JPY

Op. Income：－6.6％ YoY

Decrease due to adverse effects of strong yen

Current Profit：

3.7 billion JPY －18.3％ YoY

Decrease due to lower operating income and dividend income
Net Income
Attributable to owners of parent：

2.5 billion JPY －25.2％ YoY

Decrease largely due to lower ordinary income

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Consolidated Results Review – 1Q FY3/2017(billion JPY)

Three
Three
month
month
ended June ended June
30,2015 30,2016(A)Sales

147.0 141.4

YoY Change
Amount％Full Year
Forecast announced on
May 10, 2016

Achievement(A)/(B)%

(B)

-5.5

-3.8%

590.0

24.0%

Op. Income

3.3

3.1

-0.2

-6.6%

11.5

27.0%

Current Profit

4.6

3.7

-0.8 -18.3%

12.5

30.3%

3.3

2.5

-0.8 -25.2%

9.0

28.0%

Net Income
Attributable to owners ofparentExchange Rate:
USD/JPY

121.43 108.04 -13.39

110.0034
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Sales Trends
1Q

700.0

Full Year

561.1

600.0
500.0

Full Year Forecast(as announced on
May 10, 2016)

Sales(billion JPY)

572.1

590.0

577.0

479.9

400.0

% Achieved

24.0％

300.0
200.0

120.2

135.4

137.5

147.0

141.4

FY 3/13

FY 3/14

FY 3/15FY 3/16

FY 3/17100.0
0.0(Reference)
Exchange
Rate:
USD/JPY

1Q
Full Year

FY 3/13

FY 3/14

FY 3/15FY 3/16

FY 3/17

82.19
79.81

98.78
100.17102.17109.76121.43120.15108.04(*Note)110.00(*Note:The rate on which May 10 announcement will be based.)(NB) From FY 3/14 the method used to convert income and expenses of overseas subsidiaries changed from the year-end rate to the average rate for the period.
Figure for FY 3/13 have been retrospectively adjusted to reflect this change; however figures for 1Q of FY 3/13 have not been adjusted .

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Trends in Operating Income
Op. Income(million JPY)

1Q

14,00012,000

Full Year Forecast(as announced on
May 10, 2016)

Full Year

10,936

10,774

11,50011,371

10,000
8,000

7,765

% Achieved

27.0％

6,000
4,000

1,886

2,765

2,677

FY 3/14

FY 3/15

3,329

3,109

FY 3/16

FY 3/172,000
0FY 3/13(NB) From FY 3/14 the method used to convert income and expenses of overseas subsidiaries changed from the year-end rate to the average rate for the period.
Figure for FY 3/13 have been retrospectively adjusted to reflect this change; however figures for 1Q of FY 3/13 have not been adjusted .

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Trends in Current Profit
Current Profit(million JPY)

1Q

16,00014,000

Full Year Forecast(as announced on
May 10, 2016)

Full Year

12,454

13,217

12,50012,257

12,00010,0009,603% Achieved

8,000

30.3％

6,000
4,000

2,452

3,505

4,190

4,637

FY 3/15FY 3/16

3,789

2,000

0
FY 3/13

FY 3/14

FY 3/17(NB) From FY 3/14 the method used to convert income and expenses of overseas subsidiaries changed from the year-end rate to the average rate for the period.
Figure for FY 3/13 have been retrospectively adjusted to reflect this change; however figures for 1Q of FY 3/13 have not been adjusted .

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Trends in Net Income
Net Income(million JPY)

Attributable to owners of parent

12,000

1Q

Full Year

9,510

10,000

8,669
8,000

9,000

8,630

6,630

% Achieved

28.0％

6,000

4,000
2,000

Full year forecast(as announced on
May 10, 2016)

1,919

2,472

2,898

3,363

2,515

0
FY 3/13

FY 3/14

FY 3/15FY 3/16

FY 3/17(Note) Figures for FY 3/14 include the sum of 1.1billion JPY from gains made on the disposal of shares in affiliates.

(NB) From FY 3/14 the method used to convert income and expenses of overseas subsidiaries changed from the year-end rate to the average rate for the period.
Figure for FY 3/13 have been retrospectively adjusted to reflect this change; however figures for 1Q of FY 3/13 have not been adjusted .

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Copyright © INABATA＆CO., LTD. 2016

Trends in Sales by Business Segment(billion JPY)

700.0
600.0

561.1 Other
26.5 1.0

572.1
Other
24.2 0.5

577.0
Other
24.8 0.1

590.0 Other
27.0 0.1
Other

500.0
400.0
300.0
200.0
100.0

232.8

250.4

251.1

250.0

Housing &Eco Mat.
Plastics

37.6
52.3

34.6
52.8

41.0
48.1

42.0
50.0

Life Industry

210.7

209.3

211.6

220.9

FY 3/14

FY 3/15FY 3/16

FY 3/17(Result)(Result)(Result)(Forecast)Chemicals
Information &Electronics

0.0(NB) From FY 3/17, crane business previously classified under “Other” is classified under “Information & Electronics.”
Segment information for FY 3/16 has been prepared on the basis of the new classification.

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Copyright © INABATA＆CO., LTD. 2016

Trends in Operating Income by Business Segment(billion JPY)

1210

10.9Other

10.7 Other

0.34 0.29

0.28 0.15

2.82
8
6

1.74
0.86

2

11.5 Other

0.42 0.14

0.40

0.10

4.60
3.73
1.03
1.07

4

4.86

11.3 Other

4.48

4.43

Other
Housing &Eco Mat.
Plastics

1.52

1.80

1.01

1.10

3.83

3.50

Life Industry
Chemicals

Information &Electronics

0
FY 3/14

FY 3/15FY 3/16

FY 3/17(Result)(Result)(Result)(Forecast)(NB) From FY 3/17, crane business previously classified under “Other” is classified under “Information & Electronics.”
Segment information for FY 3/16 has been prepared on the basis of the new classification.
(NB) FY3/17(Forecast) is updated to the forecast as of November 30, 2016.

40
Copyright © INABATA＆CO., LTD. 2016

Summary of Financial Results – FY3/2016

41

Consolidated Results Review – FY3/2016<New Record High Sales, Operating Income and Net Income>Sales:

577.0 billion JPY+0.9％ YoY

Increase due largely to the impact of the weak yen

11.3 billion JPY

Op. Income:+5.5％ YoY

Increase due to bullish conditions in Plastics and the impact of the
weak yen

Current Profit: 12.2 billion JPY–7.3％ YoY

Decrease due to occurrence of foreign exchange losses
Net Income
Attributable to owners of parent:

9.5 billion JPY+10.2％ YoY

Increase due to the gain on sales of investment securities and decrease ofincome taxes
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Copyright © INABATA＆CO., LTD. 2016

Trends in Equity Capital/Net Interest-Bearing Debt/Net Debt Equity Ratio

Equity Capital

Net Int. Bearing Debt

Net D/E Ratio (Right-hand Axis)(billion JPY)

(X)

140.0
120.0

127.6
0.82

126.0

1.00

115.0
0.80

97.8

100.0
80.0

76.9

0.50
62.8

60.0

48.8

0.60

0.46
53.3

0.43
55.2

0.37
47.0

0.40

40.0
0.20

20.0
0.0

0.00
End 3/12

End 3/13

End 3/14

End 3/15

End 3/16(NB)
Equity Capital = Net Assets – Stock Acquisition Rights – Non-controlling interests;
Net D/E Ratio = (Int. Bearing Debt – Cash & Deposits) / Equity Capital
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Copyright © INABATA＆CO., LTD. 2016

Trends in Cash Flow(billion JPY)
Operating CF
Real Operating CF*
Investment CF

20
10
0

FY 3/05

FY 3/06

FY 3/07

FY 3/08

FY 3/09

FY 3/10FY 3/11

FY 3/12FY 3/13

FY 3/14

FY 3/15FY 3/16-10-20(million JPY)
FY 3/05

FY 3/06

FY 3/07

FY 3/08

FY 3/09

FY 3/10FY 3/11

FY 3/12FY 3/13

FY 3/14

FY 3/15FY 3/16

Operating CF-1,675-16,071-1,150-4,257

11,562

5,976

8,495

-15,534

19,400

-764

8,354

11,866

Change in WC-12,055-25,619-3,873-14,366

19,700-968-3,748-20,357

3,414-15,244-11,179

5,821

Real Operating CF*

10,380

9,548

2,723

10,109-8,138

6,944

12,243

4,823

15,986

14,48019,533

6,045

Investment CF-7,227

10,966-3,132-1,359947-5,529-1,436-1,629277-5,467-3,044-161* Cash flows associated with operating activities – Cash flows associated with change in working capital
44
Working capital = Trade receivables + Inventory – Trade payables
Copyright © INABATA＆CO., LTD. 2016

Reference45Summary of the Company (Business Segment 1)
1. Plastics
Sales(FY 3/16)• Sales of high performance plastics:
For automobiles and motorcycles, home electric appliances, OA
equipment, and electronic components

44% • Sales of plastics, molded plastic products and related materials(251.1 billion
JPY)

For general merchandise, sundry, architectural component, andhealthcare industries• Sales of resins/products for packaging materials and films:
Materials for garbage bags, packaging for industrial use and food
• Manufacture and sales of sheet products for sporting goods
Grip tapes for tennis rackets and baseball bats

etc.

46
Copyright © INABATA＆CO., LTD. 2016

Summary of the Company (Business Segment 2)
2. Information & Electronics
Sales(FY 3/16)

37%(210.6 billion
JPY)• Sales of raw materials for polarizing films to polarizing film manufacturers,
and sales of polarizing film to panel manufacturers; also, alignment layermaterials, electronic parts for LCD backlight units, etc.
• Sales of inkjet printer dye and toner ingredients to printer and copier
manufacturers• Materials for solar cells and lithium-ion batteries, LEDs, semiconductormaterials, etc.

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Copyright © INABATA＆CO., LTD. 2016

Summary of the Company (Business Segment 3)
3. Chemicals
Sales (FY 3/16)

8%(48.1 billion
JPY)• Sales of raw materials and additives to the resin, rubber,
textile and other industries• Sales of raw materials and additives for use in paints, inks,
adhesives, paper, etc.

4. Life Industry
7%(41.0 billion
JPY)• Raw materials for pharmaceutical intermediates, insect
repellents and insecticides, air fresheners and deodorants,
and cosmetics• Agricultural products (blueberries, fruit juices, frozen
vegetables) and marine products (ingredients for sushi)

5. Housing & Eco Materials
4%(24.8 billion
JPY)• Lumber and laminated timber• Chemicals, resin materials, stairs, flooring, prefabricatedbath units, kitchens, toilets• Recycled products (particle board made from scrap wood,and wood chips for use in wood biomass power generators)
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Copyright © INABATA＆CO., LTD. 2016

Overseas Sales (including exports from Japan)
The Americas
16.3 billion
4.6%

Europe11.4 billion
3.2%
(JPY)

Northeast Asia
199.7 billion
56.1%

FY 3/16
Overseas Sales
356.2 billion

Southeast Asia
128.6 billion
36.1%(61.7% of consolidated net sales)

Southeast Asia
Northeast Asia
The Americas
Europe49
Copyright © INABATA＆CO., LTD. 2016 Business Environment
Global Economy✓ The economic situation remains unstable due to a slowing economies in China andother developing Asian nations and a substantial foreign exchange volatility
brought on by the United Kingdom’s decision in June to withdraw from the EU.
(yen)

Long-term USD exchange rate

Source:Bank of Japan50
Copyright © INABATA＆CO., LTD. 2016 Trends in Share Price
Inabata’s Share Price for the past 10 years
JPY/share51
Copyright © INABATA＆CO., LTD. 2016 Trends in Share Price
Inabata’s share price performance vs. TOPIX for the past 10 years(09/2007=100)

Subprime loan crisis

Continuing strong yen

The Great East Japan Earthquake (March)

INABATA

Bankruptcy of Lehman Brothers Holdings Inc. (Sep.)

LDP wins majority in the election. Start of the Abe Cabinet (Dec.)

52
Copyright © INABATA＆CO., LTD. 2016 IR queries should be directed to:Inabata & Co., Ltd. Financial Management Office, IR Dept.
TEL:81-50-3684-4007 (Contact:Ms. Ryoko Mitsui)
FAX:81-3-3639-6410
E-mail inabata-ir@inabata.com

 A Cautionary Note Regarding Future Estimates
The data and future predictions contained in this document are based on information available andjudgments applicable at the time of the document’s release. Consequently the data and future forecasts
contained herein may include elements that are subject to change, and the reader should be aware that thisdocument and its contents are no guarantee of future performance.

 Re:Numerical Format
Units of ‘billion’, ‘hundred million’ and ‘million’ JPY in this document use figures that have been rounded
down. Consequently there may be some discrepancy between individual values and total values, or values
showing changes between sets of data.
53