Financial Results for
FYE 3/2017
Securities code: 4109

1. Financial Results for FYE 3/2017
 Basic Financial Data (Consolidated)
 Consolidated Statement of Income
 Non-operating Profit and Loss/Extraordinary Profit and Loss
 Sales Revenue and Operating Profit by Business Quarterly Operating Profit
 Consolidated Balance Sheet Consolidated Cash Flows, Capital Expenditures, Depreciation& Amortization, Research & Development Expenses

<Basic Financial Data (Consolidated)>
FYE 3/2017
ActualFYE 3/2016

Forecast*

Actual(In millions of yen)YoY

Vs. Forecast

Increase/
Decrease

Percentage
Increase/
Decrease

Increase/
Decrease

Percentage
Increase/
Decrease

Sales Revenue

29,85029,331

27,509

2,340

8.5

519

1.7

Operating Profit

4,372

3,909

1,388

2,983

214.8

463

11.8

Ordinary Profit

4,154

3,767

1,044

3,110

297.9

387

10.2

Profit Attributableto Owners of
Parent

2,824

2,633

1,323

1,500

113.3

191

7.2

*Announced March 1, 2017

FYE 3/2017

FYE 3/2016

Increase/
Decrease

Total Assets

52,08147,0275,053

Equity Capital

28,07824,9093,169

Interest-bearing
Liabilities

13,967

13,975-7(In millions of yen)

<Consolidated Statement of Income>YoY
FYE 3/2017

FYE 3/2016

Percentage
Increase/
Decrease

Increase/
Decrease(In millions of yen)

Sales Revenue

29,85027,5092,340

8.5

Gross Profit

8,199

4,768

3,431

72.0

Gross Profit Margin (%)

27.5

17.3

-

-

SG&A

3,826

3,379

447

13.2

Operating Profit

4,372

1,388

2,983

214.8

Operating Profit Margin
(%)

14.6

5.0

-

-

Ordinary Profit

4,154

1,044

3,110

297.9

Profit before Income
Taxes

3,815

1,519

2,295

151.1

Profit Attributable to
Owners of Parent

2,824

1,323

1,500

113.3

<Non-operating Profit and Loss/Extraordinary Profit and Loss> Non-operating Profit and Loss Extraordinary Profit and LossFYE 3/2017

FYE 3/2017

FYE 3/2016

FYE 3/2016(In millions of yen)

(In millions of yen)

438

694

Extraordinary Profit

31

508

Interest income

1328

Gain on sales of noncurrent assets

31

22

Dividend income

2

2

-

486

282

-

-

460

Extraordinary Losses

369

33

139

202

Loss on abandonment of
non-current assets

271

25

657

1,039

Loss on sales of noncurrent assets

0

7

52

62

0

0

Share of loss of entities accounted
for using equity method

Loss on sales ofinvestment securities

5

129

98

-

Loss on valuation ofderivatives-

768

Foreign exchange losses

417

-

Other

181

77

Non-operating Profit

Gain on valuation of derivatives
Foreign exchange gains
Other

Non-operating Expenses
Interest expenses

Subsidy income

Impairment loss

<Sales Revenue and Operating Profit by Business>
FYE 3/2017(In millions ofyen)(In millionsofyen)(In millions of yen)[High-purity Chemical Business: Breakdown]

High-purity Chemical
Business

Sales
Revenue

Operating
Profit25,501

Percentage
Increase/Decrease

FYE 3/2016

4,422

Sales
Revenue

Operating
Profit23,087

Sales
Revenue

1,390

Operating
Profit10.5

Surface Treatment

2,033

2,097

-3.1

Alternatives for CFCs

2,463

2,023

21.7

Batteries

5,072

2,989

69.7

Semiconductors/LCDs

12,31012,224

0.7

Semiconductor Devices

527

545

-3.2

Catalysts

854

846

1.0

Gypsum

94

107

-12.2

General products

1,342

1,461

-8.1

Other

803

791

1.4

Transportation Business
Medical Business
Other Business

218.0

4,143

698

4,195

664

-1.2

5.1

-

-792

-

-691

-

-

204

30

226

6

-9.5

345.5

<Quarterly Operating Profit>(In millions of yen)

1,600

1473
1,400
1,200

960

1,000

1025
912

800
609

600
404

399

400

288

200

86

0
-40
-79

-200

-186
-400

(In millions of yen)

Sales Revenue
Operating Profit
Operating Prof it Margin

1Q
7215
399
5.5%

FYE 3/2015
2Q
3Q
6916 6905-40-186-0.6% -2.7%

4Q
7305
-79
-1.1%

1Q
6745
86
1.3%

FYE 3/2016
2Q
3Q
7057
6789
288
404
4.1% 6.0%

FYE 3/2017
4Q
1Q
2Q
3Q
4Q
6918 7187 6757 7941 7963
609
960 1025 1473
912
8.8% 13.4% 15.2% 18.6% 11.5%

<Consolidated Balance Sheet>(In millions of yen)

Current Assets

FYE 3/2017

FYE 3/2016

Increase/Decrease

28,06922,277

5,792

Cash and Deposits

14,361

10,454

3,907

Notes and Accounts Receivable - trade

7,867

7,075

792

24,011

24,750-739

Property, Plant and Equipment

22,072

23,076-1,003

Intangible Assets

129

146

-17

Investments and Other Assets

1,808

1,527

281

12,566

11,189

1,377

Short-term Loans Payable

2,320

3,648

-1,328Long-term Loans Payable within 1 year

3,684

3,386

297

9,998

9,270

727

Bonds Payable

2,000

-

2,000

Long-term Loans Payable

5,962

6,939

-977

Shareholders' Equity

29,516
27,771
52,081

26,56824,41347,027

2,948
3,357
5,053

Non-current Assets

Current liabilities

Non-current liabilities

Net Assets
Liabilities and Net Assets

<Consolidated Cash Flows, Capital Expenditures, Depreciation &Amortization, Research & Development Expenses>(1) Consolidated Statement of Cash FlowsFYE 3/2017

FYE 3/2016(In millions of yen)

Cash flows from operating activities (*1)
Cash flows from investing activities (*2)
Free Cash Flows (*1 + *2)
Cash flows from financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year

5,341
-1,814
3,526
531
4,014
10,154
14,1695,228-1,404
3,823
1,850
5,612
4,542
10,154(2) Capital Expenditures, Depreciation & Amortization, Research & Development Expenses

FYE 3/2017

FYE 3/2016(In millions of yen)

Capital Expenditures
Depreciation & Amortization
Research & Development Expenses

2,328
3,117
1,274

1,302
3,525
1,163

2. Financial Forecast for FYE
3/2018 Financial Forecast
 Forecast by Segment

<Financial Forecast>
FYE 3/2018
Full-year forecast

FYE 3/2017
Full-year results

Sales Revenue

30,472

29,85027,509Operating Profit

3,350

4,372

1,388

Ordinary Profit

3,323

4,154

1,044

Profit Attributable to
Owners of Parent

2,497

2,824

1,323

Current Net Profit Per
Share

203.01

234.56110.33

Capital Expenditures

3,010

2,328

1,302

Depreciation &Amortization

3,309

3,117

3,525

Research &Development Expenses

1,557

1,274

1,163

(In millions of yen)

FYE 3/2016
Full-year results

<Financial Forecast by Segment>
FYE 3/2018
Full-year forecast
millionsofof yen)
(In(Inmillionsyen)
High-purity Chemical[High-purity Chemical Business: Breakdown]

Business

Sales
Revenue

FYE 3/2017
Full-year results

Operating
Profit26,016

3,687

Sales
Revenue

FYE 3/2016
Full-year results

Operating
Profit25,501

4,422

Sales
Revenue

Operating
Profit23,087

Surface Treatment

1,808

2,033

2,097

Alternatives for CFCs

2,089

2,463

2,023

Batteries

6,438

5,072

2,989

Semiconductors/
LCDs

12,304

12,31012,224

Semiconductor Devices

464

527

545

Catalysts

814

854

846

Gypsum

80

94

107

General products

1,374

1,342

1,461

Other

640

803

791

Transportation Business
Medical Business
Other Business

1,390

4,269

635

4,143

698

4,195

664

-

-1,019

-

-792

-

-691

187

31

204

30

226

6

3. STELLA CHEMIFACORPORATION
 Corporate Profile/Sales Office Locations/Plant
Locations (as of March 31, 2017)
 List of Affiliated Companies
 High-purity Chemical Business<Corporate Profile/Sales Office Locations/Plant Locations (as of March 31, 2017)>
 Corporate profile
Corporate name:Head Office:Founded:Established:
Capital:Representatives:

URL:

STELLA CHEMIFA CORPORATION
Midosuji MTR Building 3F, 3-6-3 Awaji-machi, Chuo-ku, Osaka
February 1916
February 1944
3,688,260,564 yen
Chairperson, Representative Director: Junko Fukada
President, Representative Director: Aki Hashimoto
http://www.stella-chemifa.co.jp/

 Sales officeOsaka Sales Department: Midosuji MTR Building 4F, 3-6-3 Awaji-machi,
Chuo-ku, Osaka
Tokyo Sales Department: Tokyo Tatemono Yaesu Building 2F, 1-4-16 Yaesu,
Chuo-ku, Tokyo Factory addresses
Sanpo Factory:
Izumi Factory:
Kitakyushu Factory:

7-227 Kaisan-cho, Sakai-ku, Sakai
1-41 Rinkai-cho, Izumiotsu
1-1 Kurosakishiroishi, Yahatanishi-ku, Kitakyushu

<List of Affiliated Companies>
Base

At
home

AbroadLogo

Corporate NameBusiness Segment

Location

Stella Chemifa Corporation

High-purity Chemical
Business

Chuo-ku, Osaka

Blue Express, Inc.

Transportation BusinessSakai-ku, Sakai

Blue Auto Trust Co., Ltd.

Other BusinessSakai-ku, Sakai

Stella Pharma Corporation

Medical Business

Chuo-ku, Osaka

Stella Chemifa Singapore
Pte Ltd.

High-purity Chemical
Business

Singapore

Stella Express（Singapore） Pte Ltd.

Transportation BusinessSingapore

Blue Express (Shanghai) International
Trade Inc.

High-purity Chemical
Business

China

Blue Express (Shanghai) International
Freight Forwarding Co., Ltd.

Transportation Business

China

Zhejiang Blue Star Chemical Co., Ltd.

High-purity Chemical
Business

China

FECT Co., Ltd.

High-purity Chemical
Business

South Korea

Quzhou BDX New Chemical Materials
Co., Ltd.

High-purity Chemical
Business

China

< Manufacture and Sale of High-purity Chemical Products>
Our products, fluorine compounds, have continued to be used in the manufacturing processof various products.
Segment nameMain productApplications

Surface treatment

Hydrofluoric acid for industrial
use

Used for acid cleaning of stainless steel and for thinning
glass substrates for LCDs

Alternatives for
CFCs

Anhydrous hydrofluoric acid

Material for chlorofluorocarbon and fluorine resin

Batteries

Lithium hexafluorophosphate

Electrolyte for electrolytic solution of lithium-ion
secondary batteries

Semiconductors
and LCDs

High-purity hydrofluoric acid
High-purity bufferedhydrofluoric acid
High-purity fluoride

Semiconductor
devices

General products(CaF2, PbF2, MgF2, AlF3 and others)

Cleaning solution for silicon wafers and LCDs
Solar batteries

Lens material for i-line steppers and cameras

Potassium fluoride

Auxiliary agent for manufacturing tantalum for tantalum
capacitors

Tin fluoride

Quasi-drugSemiconductors and LCDs
 Features of our products
 Result and Forecast of world semiconductor
market scale by regions
 New business development in growing market
 Maintenance and strengthening of quality edge
 Change of shipping volume of high-purity
hydrofluoric acid (semiconductors and LCDs)

<Features of our products>(1) With our ultra purification technology and ultra sensitive technology, we are able to supply the ultra-high-purity hydrofluoric
acid and the ultra-high-purity buffered hydrofluoric acid with the best quality in the world.
(2) Products Lineups are readied to respond the customer requirements, including like suppression of adhering particles, andsuppression of increased roughness of wafer surfaces, and others, for the semiconductor and FPD manufacturing process.
Product name(Semiconductor and LCDs)

Ultra-high-purity hydrofluoricacid
Ultra-high-purity bufferedhydrofluoric acid

Description
The ultra-high-purity chemical used for wet etching and wet cleaning of silicon wafers inmanufacturing semiconductors, FPDs, solar batteries and MEMS.
The ultra-high-purity chemical mixed hydrofluoric acid and ammonium fluoride.

BHF(buffered hydrofluoric acid)

The chemical mixed 50% hydrofluoric acid and 40% ammonium fluoride solutions.

LL BHFBHF with various functionalities by adding a surfactant.

LAL BHF

BHF containing a surfactant which has achieved extended service life and otheradvantages by optimizing the concentration of ammonium fluoride.

LA BHFBHF which etches silicon oxide at high speed.

HSN Series

Silicon oxide etchant with High Selectivity for silicon nitride.

LPL BHF (tentatively called)

Silicon oxide etchant without damaging to silicon and poly-silicon absolutely.

<Results and forecast of world semiconductor market scale by regions>($ million)

Forecast

400,000

Results
350,000
300,000

250,000

221,230

226,11333,60834,20032,70733,892

34,636

68,73865,537

72,173

74,102

2015

2016

2017

2018

194,230

201,070

208,395

34,83031,10232,29237,45934,25861,49669,3242013

2014

174,410200,000

150,000
100,000

34,79534,88350,0000

USA

EuropeJapan

Asia-PacificSource: World Semiconductor Trade Statistics Inc. (WSTS)

<New business development in growing market>
 Main new semiconductor factories planned in China
Manufacturer

Fujian Electronics & Information(Technology licensed by UMC)

Yangtze River Storage Technology(YRST)*Tsinghua Unigroup acquired capitalin XMC.

Place ofconstruction

Produced item

Wafer size

Production capacity

Start of production

Nanjing

Logic IC

12 inches

200,000 wafers/month

Second half of FY 2018

Amoy

Logic IC

12 inchesFirst stage: 50,000 wafers/month(completed)
Second stage: 50,000 wafers/month

Second stage: Mid-FY
2017

QuanzhouDRAM

12 inchesFirst stage: 60,000 wafers/month
Second stage: 60,000 wafers/month

Second half of FY 2018

ChongqingIC

12 inches

15,000 wafers/month

FY 2017

Chengdu-12 inchesseveral tens of thousands ofwafers/month

FY 2019

Wuhan

3D-NAND
DRAM

12 inches

20,000 wafers/month 300,000 wafers/month

FY2018FY2020

Hefei

Logic IC

12 inches-

FY 2018 to FY 2019

additionally, large-scale investments are planned on new semiconductor factories in China.
[SMIC (Beijing, Shanghai, Tianjin, and Shenzhen), HLMC (Shanghai), Intel (Dalian), etc.]
Furthermore, expansion factory by Samsung (Xian), CMOS image sensor factory (Huaiyin) by Tacoma and Tower Jazz, andothers, are also under conception stage, suggesting active launch of overseas manufacturers into China.

We have proceeded to the China semiconductor developmentwith the effective strategies.

<Maintenance and strengthening of quality edge> SA Grade HF quality Product technology generation≥ 45 nm

28 nm≤ 16 nm

Our product grade

SA/SA-X

SA-XX

SA-XXX

Metal impurities level< 100 ppt

< 10 ppt< 1 ppt

Management size ofparticle

0.2/0.1 um

0.05 um

0.03 um

Succeeded inultra-high-purity

Further strengthening particle management

We respond the needs of semiconductor manufacturers
with introducing the World’s most advanced analytical instruments.

©RION CO., LTD.

©Thermo Fisher Scientific K. K.

High resolution ICP-MS
Liquid-borne particle counter<Change of shipping volume of high-purity hydrofluoric acid(semiconductors and LCDs)>
80,000Volume of sales (tons)

70,00060,00067,266(Full-year)

69,132(Full-year)

65,177(Full-year)

65,241(Full-year)

66,069(Full-year)

50,00040,00030,00033,204(2Q)

34,199(2Q)

33,669(2Q)

32,698
(2Q)

2012年
FY
2012

2013年
FY
2013

2014年
FY
2014

2015年
FY 2015

31,257(2Q)

20,00010,0000
2016年
FY 2016

Batteries
 Features of our products
 Changes in lithium-ion battery market size and trends
in electric-powered vehicles
 Changes in battery-related domestic shipping volume
 Launch of electrolyte business for lithium-ion
secondary batteries in China
 Additive for lithium-ion batteries

<Features of our products>(1) Used as main material comprising the lithium-ion secondary batteries and commercialized ahead of othercompanies(2) Because of the product’s high purity, it is recently being used for high-performance lithium-ion secondary
batteries.
Product name

Description(related to batteries)

Lithium
hexafluorophosphate

Electrolyte for lithium-ion secondary batteries
Electrolyte for other batteries

Lithium tetrafluoroborate

Electrolyte and additives for lithium-ion primary and secondary
batteries

Additive for batteries

Additive for lithium-ion batteries<Lithium hexafluorophosphate particle form><Lithium tetrafluoroborate><Large-size container: 1 m3>

LIB sales of the world [100 million yen](Results and forecast)<Changes in lithium-ion battery market size and trends inelectric-powered vehicles>(Results)(Prospects and forecast)

In-car LIB
Growth of in-car LIB
is expected.

Consumer
LIB(year)
Source: Materials of Fuji Chimera Research Institute, Inc.

Market rollout of electricpowered vehicles will be
accelerated in the years
to come.

<Changes in battery-related domestic shipping volume>
1200
1,041
(Full-year)

Sales volume (tons)

1000
880
(Full-year)

800
740(Full-year)

600
400

469
(Full-year)

567(Full-year)

200

0
FY 2012FY 2013

FY 2014

FY 2015

FY 2016

Shipping volume of battery materials tends to increase at home.
→ High-performance large-size batteries for automobiles began to grow.

<Launch of electrolyte business for lithium-ion secondary batteries in China>
Outline*Converted at the rate of 1 Chinese yuan = 19 yen (as of October 27, 2015)

Name

Quzhou BDX New Chemical Materials Co., Ltd. (established in December 2015)

Location

17 Nianhua Road, Kecheng District, Quzhou City, Zhejiang Province, People's Republic of China

Business lineup

Lithium hexafluorophosphate (LiPF6)
Research & development and production of byproduct hydrofluoric acid for industrial use, hydrochloric acid and other fluorine
containing chemical system products
Sales of in-house products and provision of related services

Capital fund

70 million Chinese yuan (1,330 million yen*) Stella: 25.0%; Quzhou NGF Chemicals Co., Ltd.: 75.0%

Objectives

In China, continuous growth of lithium-ion secondary battery industry is anticipated. A local production system is established tohandle demand in China.

Details ofcooperation

Part of the manufacturing facilities of electrolyte for lithium-ion batteries is relocated to a joint company.
The joint company produces the electrolyte for lithium-ion batteries by the relocated facilities and markets the electrolyte in andoutside China.

<Launch of business of electrolyte for lithium-ion secondary batteries in China>
 Quzhou BDX New Chemical Materials Co., Ltd.

Product and material warehouse

Manufacturing building<Plan and schedule> 2016
Completion of relocation of manufacturing
facilities (Manufacturing capacity: 1,300 t/year at
maximum) June 2017
Start of operation of manufacturing facilities.
As soon as product evaluation (including suppliers) iscompleted, sales is slated to be started.

Utilities building<Additives for lithium-ion batteries><Schematic diagram of lithium-ion battery inside>
Electrolytic solution

DemandRoles that additive play High-temperature
endurance
Discharge
Charge High conductivity (lowtemperature) Increased capacity
 Low resistance
Positive-electrode Separator Negative-electrode Flame retardancematerialmaterial
The Solid Electrolyte Interface (SEI), where the electrode comes in contact with theelectrolyte, is important.

2012

2013

2014

2015
Results

2016
Prospects

2017

2018

GMP-related GMP (Good Manufacturing Practice)<GMP (Good Manufacturing Practice)>
Standards for Manufacturing Control and Quality Control for Drugs and Quasi-drugs
Three principles: “Reducing human errors to the lowest level"“Preventing contamination and product quality loss"“Designing systems to assure high product quality"

Inside Izumi Factory (Izumi Otsu City)

<GMP (Good Manufacturing Practice)>

Expanded to products related todaily commodities

For manufacturing
semiconductors<Examples of products for drugs>
Tin fluoride

Sodium fluoride
Sodiummonofluorophosphate<Actions of fluorine on teeth>
 To suppress Streptococcus
mutans from producing acid.
(Cavity prevention)
 To promote toothremineralization
 To form tooth resistant to acid(To form fluoroapatite)

Sales
started.
Full-scale
operationin 2016

10

Boron isotope ( B)
 10B enrichment technology, what is 10B, andproduction capacity
 Characteristics of 10B and applications of 10B
compounds

 Establishment of enrichment technology
We established a mass production technology of 10B for the first time in Japan and in November 2000, theonly enrichment plant in Japan was completed.

10B
10B

10B

10B

10B

Enrichment andseparation

Generation

10B

10B
10B

10B

10B

10B

<The only 10B enrichment plant in Japan> (completed in November 2000)

 What is enriched boron (10B)?
Natural boron is comprised of an isotope of 10B and 11B. An existence ratio of 10B is
approximately 20%, and an existence ratio of 11B is approximately 80%.
We can enrich an existence ratio of 10B more than 95%.

 Production capacity
Enriched boron (10B): 6,000 kg/year (40 tons/year as boric acid)

10B Features of enriched boron
10B

offers properties of remarkably high neutron absorption
capacity, and by increasing 10B concentration, the absorption
capacity is improved significantly.

Enriched 10B
Enriched boron

 Applications of 10B compounds• Neutron-absorbing material of spent nuclear fueltransportation and storage containers• Material of control rods of nuclear reactors and rack materialof spent nuclear fuel pools• Excess reaction control of pressurized-water reactors by
dissolving into primary cooling water.
• Cancer drug for boron neutron capture therapy (BNCT)

Spent nuclear fuel storage container(Neutron shield material)

Courtesy of Kobe Steel Takasago Works

4. Medical Business Corporate Profile (as of March 31, 2017) Boron Neutron Capture Therapy (BNCT) World’s First Accelerator-based BNCT Clinical Trial Boron-based Drug SPM-011 for BNCT Designatedfor MHLW Prioritized Review System for innovative
medicines “SAKIGAKE”
 Participation in Development of Cancer Diagnosis
Technology

<Corporate Profile (as of March 31, 2017)>
Company name:

STELLA PHARMA CORPORATION

Address:

3-2-7 Koraibashi, Chuo-ku, Osaka-shi, Osaka

Representative:

Tomoyuki Asano, Representative Director and President

Established:

June 2007

Business lineup:

Research and development, manufacture and marketing, etc. ofdrugs and medical devices

Capital fund:

1,900 million yen

Shareholders:

Stella Chemifa Corporation
Innovation Network Corporation of Japan
Sumitomo Heavy Industries, Ltd.

Laboratory:

Sakai Drug Discovery Research Center(Naka-ku, Sakai-shi, Osaka)

URL:

http://www.stella-pharma.co.jp/

<Boron Neutron Capture Therapy (BNCT)>
Boron Neutron Capture Therapy (BNCT) is a particle beam radiation therapy which
damages cancer cells specifically by making the best of nuclear fission reactions between
boron 10, stable isotope of boron, and thermal neutrons with small energy.

Administration of boron(Boron-10) compound

Boron (Boron-10) compound isselectively brought into cancer cells.
Prompt gamma ray
478 keV4He nucleus (α particle)

1.47 MeV
9 μm

Thermalneutron10B

4 μm

Irradiating with thermal neutron ray
causes boron (Boron-10) to fission.

7Li Recoil nucleus

0.84 MeV

Cancer cell which brought in boron(Boron-10) compound is selectively
destroyed.

<World’s First Accelerator-based BNCT Clinical Trial>
The world’s first BNCT clinical trials using the boron-based drug for BNCT (SPM-011), which Stella
Pharma developed, as well as the accelerator-based irradiation system for BNCT, developed by
Sumitomo Heavy Industries, “Phase II study for recurrent malignant glioma (high-grade brain tumor)”
started in December 2015 and “Phase II study for head and neck cancer” in June 2016. These trials
were started after submitting the clinical trial plan notification, and are still ongoing.
Pharmaceutical
Accelerator-based
solution bag made irradiation system made by
by Stella Pharma Sumitomo Heavy Industries

World’s first BNCT clinical trial
Recurrent malignant glioma (high-grade brain
tumor)”
 December 2015, Phase II study started.
Head and neck cancer
 June 2016, Phase II study started.

Assumed flow chart, from clinical trial to approval application
Phase I study

Phase II study

Neutron dose is increased stepwise to check safety.

Verification of effect by the dose decided.

Approval application(scheduled)<Boron-based Drug SPM-011 for BNCT Designated for MHLW
Prioritized Review System for innovative medicines “SAKIGAKE”>
Boron-based drug “SPM-011” for BNCT for which Stella Pharma Corporation performs clinicaldevelopment was designated by Ministry of Health, Labour, and Welfare (MHLW) for “Prioritized
Review System for innovative medicines ‘SAKIGAKE’” on April 21, 2017.

Drug name

Intended indications and effects

Name or trade name of
applicant

SPM-011• Recurrent malignant gliomas• Unresectable locally recurrent head andneck cancer and locally-advanced headand neck cancer (non-squamous cell
carcinoma)

Stella Pharma Corporation

The BNCT system (accelerator-based irradiation system) of Sumitomo Heavy Industries, Ltd. who
jointly carries out the clinical study was assigned for the target item of the said system as a medical
device on February 28, 2017, too.

“Prioritized Review System for innovative medicines ‘SAKIGAKE’”
When an innovative new drug or medical device satisfies severity and other specified requirementof applicable diseases, the drug or the medical device which MHLW evaluates and assigns is given
priorities in consultation and review process for its approval by using this system, and the target
NDA review period can be shortened to six months, one half of that required in ordinal review.

<Participation in Development of Cancer Diagnostic Technology>
We have undertaken the development of PET diagnostic technology using [18F]FBPA, which attracts
researchers and industry attention as a new PET drug used for “PET diagnosis,” which is atechnology useful for early detection of cancers.

Features of PET diagnosis using [18F]FBPA To be able to detect “brain tumor” which is difficult
to detect at present.
 Able to simply carry out PET diagnosis by[18F]FBPA for institutes where PET diagnosis isconducted at present.
 To be able to judge whether BNCT can be applied.

(Left) MRI image of brain tumors(Right) [18F]FBPA PET image of brain
tumorsIn this project, the development theme applied, jointly with Osaka Prefecture University and Osaka
University entitled “Development of efficient synthesis method of revolutionary PET probe particle[18F]FBPA and verification assessment of tumor specific integration capabilities” was adopted for2016 “Project for Cancer Research and Therapeutic Evolution” of Japan Agency for Medical Researchand Development (AMED) and is to be continuously implemented in FY 2017, too.

In order to provide total medical care from early cancer diagnosis to therapy, we willcontinue to carry out research and development starting this year.
Photo: Courtesy of Professor Ono at Kyoto University Research Reactor Institute5. Transportation Business Corporate Profile (as of March 31, 2017)
 Transportation System by Cooperation with Domestic
Bases Overseas Bases International Intermodal Logistics System Future Activities

<Corporate Profile (as of March 31, 2017)>
Company name:

BLUE EXPRESS CORPORATION

Address:

10 Ohamanishi-machi, Sakai-ku, Sakai-shi

Representative:

Kiyonori Saka, Representative Director and President

Established:

June 1991

Capital fund:

350 million yen

Business lineup:

Common motor trucking / International intermodal transport /Warehousing / Customs clearing agent / sales, rental and leaseof containers, tanks, etc. / Automobile maintenance services /Business related to life insurance and non-life insurance agent,
etc.

URL:

http://www.blue-express.co.jp/

<Transportation System by Cooperation with Domestic Bases>

Shipping
terminals
Sendai Office
Kanto Office
Yokohama OfficeShimizu Office
Nagoya Office
Ohama Office
Kobe Office
Kitakyushu Office

Customs
clearance sites
Tokyo Office
Yokohama OfficeOsaka Office
Ohama Office

Kitakyushu OfficeOpened in October 2014

<Overseas Bases>

China (Shanghai)Blue Express (Shanghai) International Trade Inc.
Blue Express (Shanghai) International Freight
Forwarding Co., Ltd.

Singapore
Stella Express (Singapore) Pte Ltd

<International Intermodal Logistics system>

Transportation

Storage High-purity chemicals
 Poisonous and deleterious substances Hazardous material
 High-pressure gas
 General cargo, etc.

Customs
clearance

Container
service<Future Activities>
 To steadily expand business with first priority given to the improvement ofcustomer satisfaction.
Further quality improvement, etc. of international intermodal logistics service

 To maintain continuous investment for further growth
Effective utilization of head office premises, such as the extension of hazardous
substance warehouses, etc.
 To further strengthen business operation base andrevenue baseStreamlining of compliance system, etc.

6. Future Activities
 Approaches to Advanced Energy Devices
 Development of Additives for Electrolytes ofLithium-ion Batteries (LIBs)
 Development of Catalysts for Polymer Electrolyte
Fuel Cells (PEFCs)
 Development of Electrolyte for Post Lithium-ion
Batteries Fluoride Nanoparticles
 Fluorinated Carbon Nanotubes (F-CNT) [1] Fluorinated Carbon Nanotubes (F-CNT) [2]<Approaches to Advanced Energy Devices>
Our approaches
Our advantages
LIB additives
know-howDevelopment of new
additives for advanced
LIBs

Surface
Development
treatmentof catalysts
technology
for fuel cells
Mass production
フッ素
technology for
化学
high-purity(コア技術)
electrolytes~ Roll-out to automobile andinfrastructure applications ~Development ofelectrolytes for post
LIBs

Roll-out of our core technologies toenergy devices

Appearance of sodium ion battery
prototypes from Company C

The attainment of original products that would serve as our next-generation prime source of earnings
based on our fluorine chemistry and energy-related technologies

Improvement ofcycle characteristics
Extended service life of batteriesHigh discharge
capacity
Improved cruising distance

High-temperature performance
Operation under severe conditions

Battery performance requested for
in-car applications
Appearance of
the additive*Posted on Nikkei Sangyo Shimbun(posted on July 28, 2016)

Discharge capacity retention
maintenance ratio (%)<Development of Additives for Electrolytes of Lithium-ion Batteries (LIBs)>

Improved chargedischarge
characteristics

Charge-discharge cycle (times)

Effect of improved charge-discharge cycle
characteristics by new additives

Early achievement ofcustomers’ adoption anddevelopment of massproduction technology

<Development of Catalysts for Polymer Electrolyte Fuel Cells(PEFCs)>High durability

Reduction ofrare metal usage

Extended service
life of Fuel cell

Performance required for fuel cell catalyst
Appearance of developed
fuel cell catalyst

Developed Catalyst

High activity

Existing PEFC

High-output operation
independent from air supply
conditions

Output voltage (V)Low-humidity operation

Remarkable output improvement confirmed
under the conditions(low humidity) which is aproblem for the operation of PEFC

Evaluation results of developed
catalyst activities
A system that enables in-house assessment of fuel cells is established.
The further improvement of the performance is under consideration toward sample work.

<Development of Electrolyte for Post Lithium-ion Batteries>

Imminent practical use
A prototype bicycle with a sodium-ion
battery mounted is created.
100μm

World’s highest quality level
electrolyte for sodium-ion batteries

Succeeded in development of highquality and low-cost process

Under sample work primarily to LIBs’
electrolytes users*Image illustration

<Fluoride Nanoparticles>
Development of low refractive index fluoride material for antireflection film

*Image illustration

Evolution and market expansion of smart cars, IoT, andwearable devices
Increased demand of coating material that
increases display panel visibility
Hollow introduced in particles byparticle morphology control

Conventional
product n=1.38

Achievement of low
refractive index

Hollow nano particle

http://style.nikkei.com/article/DGXMZO11794240X10C17A1000000

50 nm

Developed
product n=1.32

50 nm

<Fluorinated Carbon Nanotubes (F-CNT) [1]>With improvements in mass-production technology of carbon nanotubes (CNT), practicalapplication has occurred.
CNT is the development field where the market size smoothly progresses and further
development of applications is awaited.
F
F
Our Company core technology
Surface treatment technology by fluorine gas
F
FFF
Fluorinated carbon nanotube (F-CNT)
F
Schematic diagram of fluorinated CNT

Fluorinated carbon nanotube (F-CNT) dispersed liquid
F-CNT does not coagulate
but disperses uniformly.

For alcohol and other organic solvents,
F-CNT dispersed liquid with high dispersibility
without using any surfactant.

Coagulates
and settles

F-CNT

CNT
(No fluorine treatment)

Appearance of fluorinated CNT dispersed liquid

PR to customers started.
(Film and resin material manufacturers, etc.)

<Fluorinated Carbon Nanotubes (F-CNT) [2]>Example of developed applications
Coating-type transparent conducting film and antistatic film
 Able to be fabricated using general coating
methods (bar coat, spray coating, etc.)
 Able to achieve required specifications for
touchscreen applications
Total light transmittance: 85% or more
Sheet resistance: 500 Ω/□ or lessExample of prototype
conductive film by F-CNT

Roll-out to the display field(touchscreen, etc.)

Composite material (compounding of CNT and resin) As a filler of CNT-containing resin composite material, strength has been increased by
25% as compared to simple resin.

Roll-out to the engineering
plastic field7. Medium-term Management
Plan(FYE 3/2017 to FYE 3/2019)

Notice on modification of numerical targets
 Financial Highlights of FYE 3/2017
 Modification of Numerical Targets

<Financial Highlights of FYE 3/2017>
The business results of the FYE 3/2017 reveal that profit greatly
exceeded the initial plan.
 With the improvement of market conditions of the battery department,
profitablity was improved.
 The main raw material, anhydrous hydrofluoric acid, subsequently remained atlower levels than initially assumed.

(Plan/Results)(million yen)

FYE 3/2017(Plan)FYE 3/2017(Results)

Sales revenue(consolidated)

28,24929,850Operating profit(consolidated)

1,374

4,372

<Modification of Numerical Targets>
The operating profit and operating profit magin of FYE March/2017 achieved the target of the final
year in the first year, and the numerical targets of medium-term management plan were modified
with this achievement taken into account.
For FYE March/2018, the immediate price rise of anhydrous hydrofluoric acid is reflected anddeclining profit is anticipated, but in FYE March/2019, it is predicted that the material price rise
will slow down and at the same time, the sales of the additive for lithium-ion secondary batteries
will increase. The target operating profit is anticipated to be restored to the profit level of FYEMarch/2017.

(Before modification)

FYE
3/2018
Sales revenue(consolidated)
Operatingprofit(consolidated)

28,718
1,536(million yen)(million yen)

(After modification)

FYE
3/2018FYE
3/201929,699

Sales revenue(consolidated)

30,47232,200

1,922

Operatingprofit(consolidated)

3,350

4,400

FYE
3/2019

<Modification of Numerical Targets>
In the period of present medium-term management plan (FYE 3/2017 to FYE 3/2019), “profit” is secured
and increased by: increased sales and profit in the High-purity chemical business steady profit increase in the transportation businessWe will make investment on research and development for starting up the medical business,
and aim at achieving the consolidated operating profit of 4.4 billion yen (operating margin of 13.7%) for
the FYE 3/2019.

Medium-term numerical plan (consolidated)
Sales(100 million yen)Sales
売上（高純度）(High-purity chemical)

350
300

275

250

42

Sales
売上（運輸）(transportation)

profit

299
44

305

41

43

322
44
43

34

200
150

売上（その他）
Sales (others)

Operating profit(100
million yen)
営業利益
Operating

231

255

260

278

FYE 3/2017 (results)
2017年3月期(実績)FYE 3/2018
2018年3月期

FYE 3/2019
2019年3月期

100
50

14

0
FYE
3/2016 (results)
2016年3月期(実績)

50
45
40
35
30
25
20
15
10
5
0

Corporate slogan

Beyond the Chemical

We are drawing upon the strengths in the chemical field
whose growth we have nurtured so far andmoving toward even greater development in the future.

High-purity chemicalbusiness field

Transportation
business field

Medical business field

Items related to the business forecast posted in this presentation material are created on the basis of theinformation available as of the date of announcement of this presentation material and do not guarantee
any future business achievements. The actual business achievements may differ from assessment figuresdue to future events.
Please note that the description stipulated in this presentation material may be changed without any priornotice. We shall not assume any responsibility for any damages etc. resulting from any mistake in theinformation, etc. posted in this presentation material.
This presentation material is created to help you understand our businesses.
Please kindly note that it is your sole responsibility to make any decision on your investment.