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FY2020Financial Results Briefing for 2Q
The 97th period：Cumulative Second Quarter（Apr. 1st, 2020-Sept. 30th, 2020）

October 30, 2020

Contents

１．Financial result for 2Q, FY2020
２．Forecast for full FY2020
３．Sustainability management
４．Medium-term business initiatives
Caution in handling this document
Future forecasts, including this document, were judged according to the current information. Actual financial
results might be considerably different from the forecast mentioned here depending on the Japanese orinternational economic situation, business trends related to our company, and any risk or indefinite factors
involved in fluctuation of exchange rates.

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Outlines of Our Business and Main Products
Established in 1930, 90 years old in 2020
Stamping & Molding Products BusinessWe manufacture pressed products with ultra-high-tensile steel
molding technology that achieves both weight reduction andhigh rigidity, and resin products that provide a variety ofproducts with film decoration technology and NV performance
control technology. [USA・China・Taiwan・Thailand]

Valve Products Business
It consists of valve products with multiple world top market shareproducts, TPMS products, which are systems for monitoring tirepressure, and forging products, for which demand continues toincrease worldwide. We also manufacture valves for the aircraft,industrial machinery and energy industries. [USA・France・Belgium・
UK・China・Taiwan・S-Korea・Thailand]

Tire Valve Related

Front Pillar
Lower

Hybrid Battery
CaseValve Core

TubelessValve

TPMS
TransmitterFood Hinge

Car Air Conditioner Related

Charge ValveEngine CoverSpline Plate
For PHV

Oil PanWheel CapCap Center Ornament

Relief valve

Compressor Parts

Parts for other than Automobiles

Valves forAircrafts

IndustrialValvesOutlines of Our Group Companies

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We Do Business at 8 Domestic Plants and18 Consolidated Subsidiaries in 8 Countries
Stamping & Molding BusinessNishi Ogaki Plant Higashi Ogaki Plant

Kyushu Plant

TohokuKurihara Plant

Europe & America

Wakayanagi Plant

Pacific Manufacturing Ohio, Inc.
Pacific Manufacturing Tennessee, Inc.

Schrader-Bridgeport International,Inc.

FranceSchrader SAS

UK

UK Service Office（branch）

Belgium

Pacific Industries Europe NV/SA

Pacific Valve (Taiwan) Co., Ltd.

Asia
China

★Pacific Auto Parts (Thailand) Co., LtdTianjin Pacific Auto Parts Co., Ltd.
Changsha Pacific Hanya Auto Parts Co., Ltd.

SKoreaDomestic Consolidated
Subsidiaries

PI System Co., Ltd.
Taiheiyo Sangyo Co., Ltd.

Holding Companies etc.

★ Pacific Industries (Thailand) Co., LtdThailand

Mino Plant

Others★2 companies inThailand will bemerged on 2020/11/2

Pacific Valve Industrial Co., Ltd.
Pacific Air Controls Co., Ltd.

Pacific Auto Parts Technology (Changshu) Co., Ltd.
Japan
（Equity Method Affiliated Company

Pacific Industries
USA Inc.
August France
Holding Company
SASConsolidated

TaiwanKita Ogaki Plant

Yoro Plant

KyushuUSAValve Products BusinessIndividualJapanChubu

JCR rated
A-(Stable)

Pacific Industries
China Corporation
PEC Holdings Co., Ltd.

5/31
2２-１ in第２Ｑ
連結業績Pandemic
Management
Covid-19
Measures against Covid-19 and gaining a foothold•Thorough infection prevention•Global countermeasures and cooperating with society,family, and local community•Streamlined by cost/fixed cost reduction, using Web
meetings, reforming the way of job process•Maintaining production system, supply chain, andemployment•Production recovery, fund management

6/31

１．Financial result for 2Q, FY2020
２．Forecast for full FY2020
３．Sustainability management
４．Medium-term business initiatives２-１Consolidated
第２Ｑ 連結業績
1-1 2Q
Results

7/31
2

Became profitable in 2Q and cumulative due toimprovement efforts and sales recovery（million yen,％）

Last
2Q
Cumulative
Record2Q Cumulative
7/29
Previousforecast

Year-on-year rate

Cumulative Last forecast rate
1Q results 2Q results
results
Gain&Loss%change
Gain&Loss %change

82,76558,50023,83840,98964,827

4,683△1,600△2,249

3,111

862

5.7%

△2.7%

△9.4%

7.6%

1.3%

Ordinary
Income4,935△1,000△1,784

3,098

1,313

6.0%

△1.7%

△7.5%

7.6%

2.0%

2Q Net Income

3,473△1,000△1,2992,242942

4.2%

△1.7%

△5.5%

5.5%

1.5%

Sales
OperatingIncome✔SalesHighRecordHigh

6,327 ＋10.8 △17,937 △21.7
2,462―△3,820 △81.6

2,313―△3,622 △73.4

1,942―△2,531 △72.9

Sales recovered from the significantly decreased
sales forecast✔Operating Income +2.4 billion yen compared to the previous forecast
due to improvement efforts and sales recovery

8/31

1-2 2Q Consolidated Causes of Fluctuation in Sales & Income

Despite a significant decrease in sales due to the impact of Covid-19,
we reported a surplus by improving and reducing costs.

≪FY2020 2Q vs FY2019 2Q≫≪FY2020 2Q vs FY2019 2Q≫
Sales△17.9 billion yen
Operating Income△3.8 billion yen

Average exchange rate
・2019/2Q 109.3yen・2020/2Q 106.4yen

1-3 2Q Consolidated Business Segments

9/31

The valve business reported a surplus, and the degree ofdeficit in the stamping & molding business decreased.

≪Sales≫≪Operating Income≫（ 100 million yen ）827Valve

260

46648
190 （△27％）

32Stamping& Molding

566

8457 （△19％）1410 （△67％）△219/2Q

20/2Q

19/2Q

20/2Q

1-4 2Q Consolidated Regional Segment

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Japan and Asia reported a surplus, and the degree of deficit inEurope & America decreased≪Sales≫≪Operating Income≫

827
Asia

Europe &America

129304（ 100 million yen ）46648
116 （△10％）224 （△26％）Japan394

19/2Q

49295 （＋3％）
5 （△81％）△3306 （△22％）20/2Q

819/2Q

20/2Q

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１．Financial result for 2Q, FY2020

２．Forecast for full FY2020
３．Sustainability management

４．Medium-term business initiatives

2-1

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Full FY Consolidated Financial Forecast

FY2020 results are expected to be in the black after 2Q（million yen,％）FY2020'2020'2019 Result Previous
Forecast

First HalfResultSecondHalfForecast

165,969 135,000

64,82780,173145,000

10,0007.4%△20,969△12.6%

Sales

RecordOperating income

RecordHigh

Previous Forecast
Rat
Full year

Forecast

Year-on-year

Gain&Loss %change Gain&Loss %change

10,5112,000862

5,138

6,000

4,000

200.0%△4,511△42.9%

Oediary Income

11,130

3,000

1,313

5,187

6,500

3,500

116.7%△4,630△41.6%(2Q)Current Net
Income7,256

2,000942

3,558

4,500

2,500

125.0%△2,756△38.0%

Sales
Operating Income Ratio

6.3%

1.5%

1.3%

6.4%

4.1%

2.6%

△2.2%

ＲＯＥ

7.5%

2.0%

1.9%

7.2%

4.5%

2.5%

△3.0%

ＲＯＡ

5.2%

1.0%

0.8%

4.9%

2.9%

1.9%

△2.3%

1,614

1,622

1,613

1,661

1,661

39

High

(Operating Income base）

Net Assets per Share

✔Sales

（円）

2.4%

47

2.9%

Sales in the second half is on the upswing✔Operating Income +4 billion yen compared to the previous forecast
due to the continuous improvement and sales recovery2-2 Consolidated Causes of Fluctuation in Sales & Income
Efforts to improve and sales recovery reported a surplus≪FY2020 forecast vs FY2019≫
Sales▲20.9billion yen

Average exchange rate
・FY2019 109.2yen・FY2020 105.7yen≪FY2020 forecast vs FY2019≫
Operating Income ▲4.5billion yen

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2-3 Full year Consolidated Business Segment
Both businesses are expected to be in the black,
although sales and profits will decrease≪Sales≫≪Operating Income≫（100 million yen）

1,659
1,450Valve105518427 （△18％）
65Stamping& Molding

1,138

35 （△47％）

1,020（△10％）38

FY201919年度

FY202020年度（forecast）

60

FY201919年度

25 （△35％）
20年度
FY2020（forecast）

2-4 Full year Consolidated Regional Segment

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Both businesses are expected to be in the black,
although sales and profits in Japan, Europe, America and Asia will decrease≪Sales≫≪Operating Income≫（100 million yen）

1,659
Asia

292

1,450
265 （△9％）Europe589& America495 （△16％）

105
2322

60

15 （△36％）
6 （△73％）
Japan

777

19年度
FY2019690 （△11％）

FY202020年度（forecast）

5335 （△34％）
FY201919年度

FY202020年度（forecast）

2-5 Returns for Stockholders

16/31

Paid 10 yen as an interim dividend■Annual Dividend
FY2020 plan Annual：20yen（Mid-term：10yen

Term end：10yen）17/31

2-6

Consolidated Capital Investment/Depreciation

Carefully selected capital investment≪ Capital Investment ≫（100 million yen）

208.3

166.3

Asia 31.0

33.8

234.5

219.7
47.8

141.9

21.3
49.3

190.0

127.0

22.0

23.9

99.1
61.3

59.4

78.0

45.2

113.1 112.4'17'18

90.0

'19

24.1

150.3
23.6

24.7

33.4

41.0

25.9

13.1

9.6

163.8

'1684.1
22.2

Europe &America

Japan 89.9

≪ Depreciation ≫'20(forecast)

52.2

'16

61.8'1777.1

83.7'18'19

85.7

'20

(forecast)2-7 Consolidated Cash Flow
Secure necessary funds, continue investment

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19/31

１．Financial result for 2Q, FY2020
２．Forecast for full FY2020
３．Sustainability management
４．Medium-term business initiatives

3-1 Sustainability Management

20/31

Building sustainable society and working on SDGs

Long-term Vision PACIFIC GLOCAL VISION

Fostering trust withstakeholders
Solving social and customer
issues through products
Minimizing environmentalload
Respect and success ofhuman resourcesPromotion of manufacturingthat helps solve social issues

4 pillars of Sustainability
Management

Mid-term Management Plan
“OCEAN-22”
Stamping & Molding BusinessContributes to weight reduction, safety, andimprovement of environmental performance ofautomobiles.
Active development of sound/vibration-proof
products that contribute to EV conversion

Valve & TMPS Business
Maintaining a stable supply of core car productsthat are indispensable for infrastructure
Development of TPMS variations that contributeto safety and the environment

New Business
Development of products and services in
new fields that can contribute to society

15 Materialities

3-2 Sustainability Management

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Identifying 4 pillars of Sustainability and 15 Materialities
Pacific Glocal Vision：
A truly GLOCAL company that is worthy of stakeholders’ trust, rooted in communities
and able to co-exist and co-develop with them

■Fostering trust with stakeholders

・Corporate ethics andcompliance・Responsible procurement
・Improvement in customer
satisfaction
・Local community development Donation of PCR test car
Pacific Glocal Vision：
A company that leverages its core technology and continuously provides new business,
new products and new technologies toward a sustainable society■Solving social and customer issues through products・Contribution to a sustainable mobility society
and prosperous living
・Improving mobility safety
・Development of environment-conscious product3-3 Sustainability Management

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Identifying 4 pillars of Sustainability and 15 Materialities
Pacific Glocal Vision：
A company that leverages its core technology and continuously provides new business,
new products and new technologies toward a sustainable society■Minimizing environmental load
・Mitigation of the climate change
and adaptation
・Sustainable resources use
・Conservation of water resources
PACIFIC Environment
Challenge 2050

Pacific Glocal Vision：
A company that values employees’ new ideas and challenges and ensures they feel theharmonious balance between work and life

■Respect and success of human resources
・Respect for human rights
・Stable employment and decent work
・The safety and the health of employees
・Development of human resources andCultivation of culture we can challenge
・Diversity and inclusion

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１．Financial result for 2Q, FY2020
２．Forecast for full FY2020
３．Sustainability management
４．Medium-term business initiatives

24/314-1 Changes in the External Environment and Mid-term Effort

Speed up strategic efforts【once in a century transformation】【Societal Demand 】

・CASE
・Progress in mobility society

・SDGs ・ESG
Changes have been
accelerated due to theimpact of Covid-19

Market needs：Improvement of safety, environmental,
and comfort performance

Our Policy
Technology development and base maintenance tomeet industry trends and customer needs
Acceleration of development of new technologies, newmaterials, and new construction methods

Weightsaving

Sound/
Vibration
proofEV

New fields/
New products

25/3123

4-2 Expansion of Stamping & Molding Technologies

４-５ ＴＰＭＳの拡充

Weight saving, Crash analysis, Soundproof and Vibration proof
High-performanceproductsSoundproofing and vibration isolation of EV noise
Development of FRP/new materialHigh designresin

Film decoration

Weight saving
body frame productsSoundproof andVibration proof
Urethane foam
technology

Aluminum

Body structure proposal bycrash analysis technology
1470MPa cold stamping
Establishment of mass
production technology

FSW, Variouswelding
technologies

Hot stamping
Resin molding
Cold ultra hightechnology Aluminumstamping
tensile stamping
Stamping single pieces
Small stamping pieces
Stamping molding technology
Mold / welding / painting /molding

Core technology

Sub-ASSYForgingstampingLarge body
frame ASSY
Functionalcomponents

NowFuture4-3 Evolution to be a body shell manufacturer

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Structural proposal and Assembly area expansion■Strengthening body frame stamping products
Deepening of ultra-high-tensile
stamping molding technology→Further expanding the coldmolding areas .
Deepening of crash analysis technology→Proposal of the optimum structure of
the bodyExpansion from small assemblies tomedium-sized areas→Received an order for large body frame

Muffledsound・Expanding needs due to EV and European noise regulations

Road noise・Deepening urethane foam technology and expanding areas bydeveloping new materials

High speed

Low speed■Sound/Vibration proof against EV noise

Mid speed

ASSY components

Enginetransmission soundWind noise
Tire pattern noise
Gear noise

Brake noise

Zone of audibility

4-4 Expansionof Valve Technologies
４-５ ＴＰＭＳの拡充

27/31
23

Sealing/Controlling technology
IoT・New area Expanding new fields and individual

development/proposal by searching needs
Creating functional products that meetthe market needs of the environment,
energy saving, and electrification

Various forindustrial use

Valves for ControlMatching the needs to individual equipmentdevelopment/proposal

Maintaining an overwhelming position
with tire valves and car air conditioner valves

Pressure, flow control, andelectric control technologies

TireKeeping top market share for OE Valves
Creating synergy with Schrader

Connected to social
infrastructure

TPMS

Sensing, electronic control,
Sealing technology and wireless technology
Core technology

Function addition
More variation System proposal

Next-generation
product development

NowFuture

4-5

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As a Manufacturer Specializing in Valves
Maintaining an overwhelming position in tire valvesand car air conditioner valves■Development of a heat-pump car air conditioner valves for EVs
Changes in power train

Insufficient heat sourcefor heaters

Heat-pump
air conditioners→Control valve required for transition to heat pump air conditioner■Sales expansion for TPMS/Valve products
・Products for after market go on saleNorth America: Nov. 2020～■Creating synergy with Schrader・Strengthening manufacturing in quality, cost,productivity, etc.
・Collaboration for new products development andmutual sales

Product name

29/31

4-6 Technology Development in New Fields
Applying sensing and Wireless technology toSolution development■Applying monitoring & wireless technologies to the newproduct development《 Applied areas 》

Food production &transportation process

Environmental
monitoring
demandFrozen food

Refrigerated container

TrucksMedical goods /specimen

Medical goods
transportation

The livestockindustry■Applying sensing technologies to safe/secure productdevelopment

・Charging cables with temperature monitoring for forklifts
・Server monitoring systems for data centers4-7 Sustainability Report

30/31■Issued on Oct. 28 th after enriching the contents
and changing the name・Materiality identification process

・Environment vision
・Globalizing information disclosure
・Enriching non-financial information

https://www.pacific-ind.co.jp/csr/report/