Our Management

From the President

A Look Back at the Fiscal Year under Review
Sales and income were down due to stagnation in overseas economies
and yen appreciation.
In the ﬁscal year under review, ended March 31, 2013, the world
economic environment was tough overall, despite gentle recovery in
the United States buoyed by improvements in the housing market andconsumer spending. Conditions in Europe became more difﬁcult due tothe worsening of the debt crisis and the employment situation, while
emerging economies such as China and India experienced a slowdown
in growth as a result of stagnation in exports to Europe and personalconsumption. In Japan, expectations of economic recovery are risingfollowing high stock prices and the correction of yen appreciation since
the end of last year, but recovery is proving to be extremely slow becauseof reduced exports related to the poor state of overseas economies andover-appreciation of the yen as well as declining consumer conﬁdence.
As a result of the above factors, sales and income both declined incomparison with the year ended March 31, 2012, with consolidated net
sales down 5.0% year on year, to ¥190.8 billion, operating income down
24.4%, to ¥10.6 billion, and net income down 11.2%, to ¥7.7 billion.

Net Sales

Operating Income / Net Income¥ Billion
250¥ Billion
25190.8

200

20150

15100

1050

502009201020112012 2013 FY

010.6
7.7

2009

2010

2011

Operating Income
Net Income

P.23
Performance by Operational Segment
For details of performance by operational segment,
please see “Performance by Operational Segment” on page 23.

10

LINTEC ANNUAL REPORT 20132012 2013 FY

Forecasts for the Fiscal Year Ending March 31, 2014
Following domestic and overseas economic recovery, we expect increased sales and income.
Regarding forecasts, although concerns remain about Europe’s economic stagnation,
recovery is strengthening in the United States, and stable growth is expected to continue
in emerging economies, including China and India, as a result of recovery in exports andconsumer spending. In Japan too, better corporate performance from improvement in theexport environment, due to factors including yen depreciation and a pickup in overseas
demand, as well as an upturn in consumer conﬁdence stemming from high stock prices
are expected to lead to genuine recovery in the second half of the ﬁscal year.
In this economic environment, in the ﬁscal year ending March 31, 2014, we are forecasting
net sales of ¥210.0 billion, up 10.0% year on year, operating income of ¥15.0 billion, up 42.0%,
and net income of ¥10.5 billion, up 36.7%.

Forecasts by Operational Segment
Printing and Industrial Materials Products:

Electronic and Optical Products:

Paper and Converted Products:

net sales ¥90.5 billion, up 9.3% year on year,

net sales ¥82.4 billion, up 14.0% year on year,

net sales ¥37.1 billion, up 3.9% year on year,operating income ¥3.8 billion, up 58.3%

operating income ¥7.1 billion, up 121.9%

operating income ¥4.1 billion, down 18.0%

Printing and variable information
products operations

Advanced materials operations

Fine and specialty paper products operations• Semiconductor-related tapes: growth• Special function papers: increased• Adhesive papers and ﬁlms for seals

through continued increase in demand

demand for oil-resistant papers andand labels: increased domestic demand

related to mobile products, including

other papers

related to food, consumer electronics,smartphones

and automobiles, and recovery in orders
in Asia
Industrial and material operations• Automobile-use adhesive products:
increased demand as Japanese automobile• Coated ﬁlms for MLCC production:solid sales with traction provided bysmartphone demand. Our ﬁlms are wellregarded for use with high-end products• Touch screen-related products:

manufacturers produce record number offocus on development and sales expansion

vehicles worldwide and sales of two-of new products

wheeled vehicles in Asia show recovery• Window ﬁlms: positive effects of constructing
a direct sales network in the United States

Optical products operations• Optical functional ﬁlms: increased
demand through recovery in orders forConverted product operations• Release papers for ﬂexible printed circuit(FPC) coverlayers: solid sales through positiveeffects of tablet and smartphone demand• Casting papers for carbon ﬁber composite
materials: increased demand due toexpanded usage of carbon ﬁbers, including
in new model passenger aircraft• Casting papers for synthetic leather:trend toward recovery in orders, growthin Chinaﬂat-screen TVs and increasingly widespread usage of smartphone andother products

LINTEC ANNUAL REPORT 201311Our Management

From the President

Activities for the Year Ending March 31, 2014
We are working in unison Company-wide to reform costs.
Capital Expenditures /Depreciation and Amortization¥ Billion
15

Based on its management policy positioning the year ending March 31, 2014, as a year to meetchallenges and move into new growth areas, LINTEC is working to build an operating basethat can reliably create income, despite the difﬁcult operating environment, and to establish

12.3

1210.1a strong corporate structure. In April 2013, we reformed our head ofﬁce organization, setting
up a new Cost Innovation Division. Previously, activities for cutting costs were centered on
the Production Division, which achieved a degree of success. However, the Cost Innovation

9Division is now at the center of cost-cutting efforts, working closely with each plant to6thoroughly eliminate waste, attacking the problem from various directions through measures
including reductions in raw material costs, product integration, eradication of dead stock,3and rationalization of order acceptance and delivery operations. The division will also actively02009

2010

2011

2012 2013 FY

Capital Expenditures
Depreciation and Amortization

examine and consider the integration and reorganization of facilities at domestic production
and processing sites, including Group companies, and improvement proposals fromsuppliers regarding changes in the means of supply of raw materials. It will make furtherefforts, more meticulous than ever, to implement radical reform at a Company-wide level
including not only production divisions but also marketing and R&D divisions.
Activities for the Year Ending March 31, 2014
We will further bolster and expand overseas operations.

Overseas Sales asa Percentage of Total Sales

LINTEC is pushing forward with globalization of its operations, centered in Asia, based on its policyof manufacturing products nearer to customers to ensure a stable supply through local production.
During the ﬁscal year under review, we completed our second plant at LINTEC (SUZHOU)TECH CORPORATION, which produces adhesive ﬁlms for seals and labels and other items,

Overseas

33.7%

and built and put into operation an adhesive ﬁlm and release paper plant at LINTEC(THAILAND) CO., LTD., which was founded in 2011. In the year ending March 31, 2014, weexpect further increases in sales and income through meeting expanded local product

Domestic

demand, development and establishment of new sales routes, and boosted cost competi-

66.3%

tiveness as a result of measures including a greater proportion of local procurement.
In the ﬁscal year under review, we established the company LINTEC HI-TECH (TAIWAN),
INC., as a sales base for Printing and Industrial Materials Products. While considering future
strengthening of cooperation with LINTEC (THAILAND) CO., LTD., and other companies, in Taiwan,
where there are many electronics manufacturing service companies, we are working to expand
sales centered on industrial-use adhesive tapes used in the production of smartphones andtablets. In order to reliably capture demand in emerging economies, we are considering
Vietnam and India as our most promising candidates for building new plants, following ourplant in Thailand, and in preparation for that, we are making efforts to set up sales expansion
and delivery systems in both countries. At the end of 2012, we established a new sales basein Hanoi, Vietnam. We plan to introduce cutting facilities and begin operations by the startof 2014. We are also focusing efforts on expanding operations in the Indian market, and having
completed local incorporation of our representative ofﬁce in New Delhi, we plan to establish

LINTEC (THAILAND) CO., LTD.

12LINTEC ANNUAL REPORT 2013

a delivery center in Mumbai with warehouses and cutting facilities in the ﬁscal year 2014.

As of March 31, 2013, overseas sales represented 33.7% of LINTEC’s total sales, andwe aim to quickly increase this percentage to more than 40% as we continue to work
proactively to globalize our business.
Shareholders Returns
By changing our basic policy, we have clariﬁed the high value we put on shareholders.
LINTEC’s basic policy regarding the appropriation of proﬁts was “to increase businessearnings and strengthen the Company’s ﬁnancial position from a long-term perspective

Cash Dividends per Sharewhile paying dividends that reﬂect consolidated business results.” Based on this policy,
we issued dividends as initially planned, paying ¥34.00 per share, which resulted in¥
50

a consolidated payout ratio of 33.1%.
From ﬁscal year 2014, in order to clarify the high value we put on our shareholders, wechanged our basic policy regarding the appropriation of proﬁts as follows. “LINTEC regards

42.00
4030

enhancement of return of proﬁts to shareholders as one of its most important management
issues and fundamentally aims to provide stable and continued returns after considerationof each ﬁscal year’s consolidated performance while strengthening its management base.

20
10Internal revenues are used effectively to reinforce the Company’s ﬁnancial base and provide
increased future corporate value through investment in production facilities and R&D.”

02010

2011

2012

2013 2014 FYForecast

For the ﬁscal year ending March 31, 2014, based on projections of consolidated net incomeof ¥10.5 billion, which will equate to net income per share of ¥140.57, we intend to issue
dividend payments of ¥42.00 per share.
In Closing
As previously stated, as a year to meet challenges and move into new growth areas, we havepositioned the ﬁscal year ending March 31, 2014, as important to LINTEC in returning ourperformance to an upward trajectory. Employees throughout the Group will strive in unison
to reform costs and build a lean corporate structure with no waste in order to increase income.
Also, LINTEC’s biggest goal will be to ensure the Group’s products and services are useful forcustomers, and by doing so, steadily increase our loyal users. We will continue to work toprioritize customers and exceed their expectations with our products and services. We will also
consider CSR in all our activities, maintaining high ethical values and a sense of responsibility
as a member of society and promoting CSR management together with all our employees.
In closing, I would like to ask our shareholders and other investors for their continued support.
August 2013

Akihiko Ouchi
President and CEO
LINTEC ANNUAL REPORT 201313