MANAGEMENT STRATEGY

A Message from the President

A Year toAccelerate Innovation

Hiroyuki Nishio
Representative DirectorPresident, CEO and COO

12

LINTEC ANNUAL REPORT 2018

Since April 2017, we have been advancing initiatives under our medium-termbusiness plan, LINTEC INNOVATION PLAN 2019 (LIP-2019), which continues throughthe fiscal year ending March 31, 2020. Aiming to achieve its final quantitative
OVERVIEW

targets, we are accelerating innovation—the plan’s overriding theme—and moving
forward with key initiatives.

Performance Review—Year Ended March 2018
We recorded increases of more than 20%
in both net sales and operating income.

Net sales reached a record high due to contributions from the three companies in Europe and thefirst fiscal year—the global economy saw economic

semiconductors and electronic components. Operating

expansion in the United States as corporate earnings

income increased more than 20.0%. However, ourand consumer spending improved. Europe’s economy

business results revealed issues. From a businessalso continued recovering modestly. Further, China

portfolio perspective, our results were imbalanced.

and other parts of Asia showed signs of economic

While businesses related to electronics accounted forrecovery due to increases in internal demand andthe majority of earnings, businesses that normally

exports. In Japan, meanwhile, the economy trended

generate stable earnings flagged against a backdrop

steadily overall thanks to better corporate earningsof fiercer selling-price competition and higher fuelstemming from robust overseas demand, and to aand raw material prices. Further, the performances ofmoderate pickup in consumer spending, which

certain overseas Group companies remained lacklus-

resulted from a more favorable job market.

ter, and as a result of recording extraordinary loss

In these business conditions, partly due to contributions from three companies in Europe and theESG

and a favorable performance by businesses related toSTRATEGY

United States that were acquired at the end of 2016
In the fiscal year ended March 31, 2018—LIP-2019’s

related to these companies, profit attributable toowners of parent declined.

United States that were acquired at the end of 2016,
the LINTEC Group achieved year-on-year increases of
20.9% in consolidated net sales, to ¥249.0 billion; and21.1% in operating income, to ¥20.1 billion. Profit
attributable to owners of parent declined 1.7% year
extraordinary loss of provision for business structure
improvement of ¥1.0 billion in relation to U.S. manufacturing subsidiary MADICO, INC., and goodwill
impairment loss of ¥1.0 billion incurred by U.S.
functional film manufacturer VDI, LLC, which weacquired. The operating profit margin was 8.1%, andROE was 6.2%.

%

1086

8.1
6.8

7.2

5.8

8.4

8.1

8.1

6.4

6.6

6.2

FINANCIAL INFORMATIONon year, to ¥11.3 billion, due to the recording in

Operating Profit Margin / ROE

42020142015

Operating Profit MarginROE2016

2017

2018

(Fiscal year ended March 31)

LINTEC ANNUAL REPORT 201813

MANAGEMENT STRATEGY

A Message from the President

LINTEC INNOVATION PLAN 2019 (LIP-2019)
Period: From April 2017 to March 2020
Basic Policy: Deepening innovation aimed at driving new growth
Quantitative Targets: M ajor numerical targets in the final year of LIP-2019, the fiscal year ending March 31, 2020
(on a consolidated basis)
Net Sales¥270.0 billion

Operating Income¥25.0 billion

Operating Profit Margin

ROE

More thanMore than

9%9%

Key Initiatives 
1 Strengthening of regional strategy(1) Increase in the domestic share and development of new markets and new demands(2) Strategic investment and business expansion in the Asian region(3)	Expansion of the existing fields in Europe and America and the pursuit of synergies with theacquired subsidiaries

2 Creation of new value(1) Creation of differentiated products which exceed customer needs(2) Development of next-generation products anticipating market changes

3 Bolstering the corporate structure(1) Ensuring soundness of the Group companies and continual increase in earnings(2) Promotion of cross-sectional operational reforms(3) Further promotion of cost structure reforms

4 Activities for realizing a sustainable society(1) Promotion of business activities conducive to solving social concerns(2)	Promotion of work-style reforms, fostering of diverse human resources and encouragementof their active participation in the workplace

14

LINTEC ANNUAL REPORT 2018

Achievements and Progress of Key Initiatives (1)
LINTEC Group’s products, we will further strengthen
coordination between our sales subsidiary in theNetherlands, LINTEC EUROPE B.V., and the UnitedOVERVIEWThe Group is implementing regional
strategy in Japan, Asia, North America,and Europe.

Kingdom’s LINTEC EUROPE (UK) LIMITED, a sales
With respect to “Strengthening of regional strategy,”in Japan we continued to advance initiatives aimed at

subsidiary that we acquired.
Next, let me turn to the “creation of new value.”In April last year, we internally reorganized theactively developing markets. In the Southeast Asian

Research & Development Div. and introduced a newmarket, LINTEC ASIA PACIFIC REGIONAL

R&D scheme. Under the new scheme, the Research

HEADQUARTERS PRIVATE LIMITED, which is in& Development Div. and the Sales Div. coordinateSingapore, is spearheading efforts to expand andmore closely at early development stages and con-increase the efficiency of operations. In particular,

duct full verifications at key points, thereby prevent-last year we merged LINTEC BKK PTE LIMITED,

ing setbacks in the development process andwhich was an adhesive products sales subsidiary inensuring that each theme quickly takes shape with-Thailand, with LINTEC (THAILAND) CO., LTD., aout fail. Through this scheme, we will accelerate

manufacturing subsidiary in the same country. Going

new product development and provide new value

forward, we will introduce high-performance slittingthat caters to customers’ needs.

STRATEGY

unearthing new demand. Overseas, we are also

facilities; roll out the products of MACTAC AMERICAS,
LLC, an adhesive products manufacturer that weacquired, in the Southeast Asian market; and undertake the new development of local distributors ofwindow films for automobiles. As for the North
American market, we will leverage the sales network of MACTAC AMERICAS to grow sales of ourESG

high-value-added products. Labelexpo Americas
2018, which is to be held in the suburbs of Chicago
in September this year, will provide an extremely
important foothold for our development going forward. In Europe, also aiming to grow sales of theIn May, the LINTEC Group exhibited at Labelexpo
Southeast Asia 2018 in Thailand. Targeting theSoutheast Asian market, we displayed and promoted
the products of MACTAC AMERICAS.

We reorganized Group companies inJapan and overseas.

FINANCIAL INFORMATIONAchievements and Progress of Key Initiatives (2)U.S. subsidiary MADICO, INC., which was performing
poorly. We are taking a range of measures to improveearnings. For example, we have fully withdrawn fromRegarding “bolstering the corporate structure,” as aPV backsheets, and we are rebuilding the manufac-measure aimed at ensuring the soundness of Groupturing system. Other initiatives included merging two

companies and a continual increase in earnings, wecompanies in Thailand. In Japan, meanwhile, weembarked on a radical management rationalization ofmerged the adhesive products slitting and processing
LINTEC ANNUAL REPORT 2018

15

MANAGEMENT STRATEGY

A Message from the President

operations of our Hiratsuka Office and those of Groupexamination of the human resources system to help

company FUJI-LIGHT, INC., to establish SHONAN

employees balance work and family care, and the

LINTEC KAKO, INC. At this company’s new Hiratsuka

raising of awareness in relation to diversity within

Plant, construction of which was completed in

LINTEC. Further, with a view to helping address

December 2017, we will further strengthen competi-social issues through our mainstay operations, wetiveness in relation to quality, cost, and delivery.

have established the SDGs* Committee, comprisingAlso, a project that we launched to reform work

employees from a wide variety of departments. My

across the organization by standardizing work pro-ambition is for the LINTEC Group to be a business incesses is making steady progress. These measures

which each employee has a real sense of contribut-

are closely linked to the work-style reforms set out

ing to society through their day-to-day work.

in our “activities for realizing a sustainable society.”

Moreover, I believe that realizing this ambition isThrough such measures, we will eliminate depen-necessary for the growth and development of thedence on the skills of individuals, in other words

Group as a whole.

situations where only certain personnel understandwork methods; increase work efficiency throughout
each division and department; and, ultimately, foster*S DGs: Sustainable Development Goals. Adopted at the United Nations
Sustainable Development Summit in 2015, SDGs consist of 17 goals
and 169 targets for achieving a sustainable society.

talented personnel and enable them to fully realize
their capabilities.
In relation to “activities for realizing a sustainablesociety,” we are also advancing efforts other than theactivities centered on the aforementioned workreform project. I feel that these other efforts under
this key initiative also made definite progress in theplan’s first year. Specifically, the Diversity Committee
has moved forward with initiatives to enable female
employees to fully realize their potential, theHiratuska Plant, SHONAN LINTEC KAKO, INC.

Performance Outlook—Year Ending March 2019
Having rebuilt overseas Group companies,
we are targeting higher revenues andearnings.
In the fiscal year ending March 31, 2019, fuel andraw material prices as well as fixed costs are likely
to rise. However, we will increase sales while¥257.0 billion; 14.5% in operating income, to ¥23.0billion; and 42.1% in profit attributable to owners ofparent, to ¥16.0 billion.
FY2019 Forecasts (year on year)
Net Sales¥257.0 billion(+3.2%)

Operating Income¥23.0 billion(+14.5%)

Profit Attributable to Owners ofParent¥16.0 billion(+42.1%)

reducing costs. In addition, we expect improvements from the overseas Group companies thathave been performing sluggishly. In light of theaforementioned factors, we forecast year-on-yearincreases of 3.2% in consolidated net sales, to16

LINTEC ANNUAL REPORT 2018

Shareholder Returns
year ending March 31, 2019, based on our projectionof net income per share of ¥221.75, we plan toincrease dividend payments ¥12 per share, to ¥78

OVERVIEWIn the current fiscal year, we plan toincrease dividend payments ¥12 pershare, to ¥78 per share.

per share, and we expect a consolidated payout ratio
LINTEC regards enhancement of return of profits toof 35.2%. As we continue working to improve ourshareholders as one of its most important manage-

corporate performance in the coming years, we will

ment issues. From the perspective of distributing

also work to further enhance shareholder returns.

profits, we aim to provide stable and continued
returns after consideration of each fiscal year’s
consolidated performance while ensuring a balancewith retained earnings to maintain a healthy balance
sheet. In the fiscal year ended March 31, 2018,
although profit attributable to owners of parent
we paid a year-end dividend of ¥33 per share as¥78

80

66
60

60

40
20

29.7

66

54

48%

80

41.6

35.7

40

42.3

STRATEGY

declined due to the recording of extraordinary loss,

Cash Dividends per Share / Dividend Payout Ratio

20planned. Together with an interim dividend of ¥33
per share, this gave a full-year dividend of ¥66 pershare, the same level as in the previous fiscal year.
With regard to dividend payments for the fiscal02015

2016

20172018

2019(Forecast)(Fiscal year ended / ending March 31)

0Cash Dividends per ShareDividend Payout Ratio (right)

In Closing
companies in Europe and the United States that wesecond year of LIP-2019, as a year to accelerate inno-

acquired in 2016. Moreover, as well as forging ahead

vation and proactively advance measures based onwith concerted efforts to reach the plan’s final quan-

the key initiatives. Although business conditions aretitative targets of net sales of ¥270.0 billion and oper-

challenging, we have to take bold steps. At the sameating income of ¥25.0 billion, the entire Group willtime, we must go back to our initial viewpoint tofocus on ensuring sustained growth beyond theproperly analyze the progress and results of theplan’s term.

measures we are currently implementing and adjust

As we move forward, we would like to ask our shareholders and investors for their continued support.

FINANCIAL INFORMATION

our trajectory in a timely manner if strategies needESG

We are viewing the current fiscal year, which is therevising. In particular, turning around Group companies that have had lackluster business results is apressing task. In this regard, we will continue rightsizing workforces and consolidating and rebuilding
bases. Further, we will develop new products thatAugust 2018

meet the expectations of customers, reduce costs

Hiroyuki Nishio

through a range of measures to bolster the corporate

Representative Director

structure, and create synergy benefits with the three

President, CEO and COO

LINTEC ANNUAL REPORT 201817