Consolidated Financial Results
for the First Six Months of the Fiscal Year Ending March 31, 2018 [J-GAAP]
November 9, 2017

Company Name:
Dai Nippon Printing Co., Ltd.
Stock exchange listing:Tokyo
Stock code:
7912
URL: http://www.dnp.co.jp/
Representative:
Yoshitoshi Kitajima, President
Contact person:
Takaaki Tamura, General Manager, Corporate Communication
Telephone:+81-3-6735-0101
Securities report issuing date:November 10, 2017
Dividend payment date:
December 8, 2017
Preparation of quarterly earnings presentation material: No
Holding of quarterly earnings announcement:
No(Amounts under one million yen have been rounded down.)
1. Consolidated financial results for the first six months ended September 30, 2017
(April 1, 2017 – September 30, 2017)(1) Consolidated financial results(Percentages show change from corresponding year-ago period.)
Net Income (Loss)
Attributable toOperating Income
Ordinary Income
Parent Company
Shareholders

Net Sales

Six months ended
September 30, 2017
Six months ended
September 30, 2016

Million yen%

Million yen%

Million yen%

Million yen%

687,498(1.4)

16,94745.2

19,106

32.7(21,428)–

697,492(3.5)

11,671(42.3)

14,392(42.4)

15,142(18.3)

Note: Comprehensive income: For the first six months ended September 30, 2017: ¥14,539 million (–%)
For the first six months ended September 30, 2016: ¥(8,130) million (–%)
Diluted Net Income
per Share

Net Income (Loss) per ShareSix months ended
September 30, 2017
Six months ended
September 30, 2016

Yen

Yen

(70.44)

–

48.75

48.74

Note: Dai Nippon Printing Co., Ltd. implemented a share consolidation in which two shares of common stock wereconsolidated into one share effective October 1, 2017. Accordingly, it has estimated net income per share and diluted net
income per share assuming this share consolidation was implemented at the start of the previous consolidated fiscal year.

(2) Consolidated financial position
Total Assets

Net Assets

Equity Ratio

Million yen

Million yen%

As of September 30, 2017

1,753,592

1,070,454

58.3

As of March 31, 2017

1,741,904

1,081,286

59.4

Note: Stockholders’ equity: As of September 30, 2017: ¥1,022,318 million

As of March 31, 2017: ¥1,033,864 million

2. Dividends
Annual Dividends (Yen)First
Quarter-end

Year ended
March 31, 2017
Year ending
March 31, 2018

SecondQuarter-end

–

16.00

–

16.00

Third
Quarter-end

Year-end

–

Total

16.00

32.00

Year ending March 31, 2018–
32.00
(Forecasts)
Note: Revisions to the most recently announced dividend forecasts during the current quarter: No–

Note: Dai Nippon Printing Co., Ltd. implemented a share consolidation in which two shares of common stock wereconsolidated into one share effective October 1, 2017. As a result, year-end dividends per share for the fiscal year
ending March 2018 (forecast) shows dividends after the share consolidation, and total annual dividends shows “–”.
Without the share consolidation, year-end dividends per share for the fiscal year ending March 2018 would be ¥16.00.
For further details, see the section titled, “Explanation regarding appropriate use of earnings forecasts and otherspecial notes.”

3. Consolidated earnings forecasts for the year ending March 31, 2018
(April 1, 2017 – March 31, 2018)(Percentages show change from corresponding year-ago period.)
Net Income
Attributable to
Net Income
Operating Income
Ordinary Income
Parent Company
per Share
Shareholders

Net Sales%Yen1,420,000
0.7
35,00011.4
40,0008.9
26,0003.1
Note: Revisions to the most recently announced earnings forecasts during the current quarter: No

85.81

Full year

Million yen%

Million yen%

Million yen%

Million yen

Note: Net income per share in the consolidated earnings forecasts (full year) for the fiscal year ending March 31, 2018is adjusted for the impact of the share consolidation. Without the share consolidation, net income per share in the
consolidated earnings forecasts (full year) for the fiscal year ending March 2018 would be ¥42.91. For further details,
see the section titled, “Explanation regarding appropriate use of earnings forecasts and other special notes.”

Other information(1) Changes in significant subsidiaries during the current quarter (changes in specified subsidiaries
resulting in change of scope of consolidation): No(2) Application of accounting procedures peculiar to quarterly consolidated financial statement
preparation: No(3) Changes in accounting policies, changes in accounting estimates, and restatement of revisions
1) Changes in accounting policies with revision of accounting standards: No
2) Changes in accounting policies other than the 1) above:No3) Changes in accounting estimates:
Yes
4) Restatement of revisions:No
Note: For further details, see the section titled, “2. Quarterly consolidated financial statements and key notes, (4)Notes regarding quarterly consolidated financial statements [Changes in accounting estimates],” on page 11.

(4) Number of common shares issued and outstanding
1) Number of common shares
outstanding at end of each period(including treasury shares)
2) Number of treasury shares at endof each period

As of September 30,
2017324,240,346
shares

As of March 31, 2017

331,740,346
shares

As of September 30,
201722,672,282
shares

As of March 31, 201724,143,555
shares3) Average number of shares
outstanding during the period
Six months ended
304,198,786 Six months ended
310,629,621
September 30, 2017
shares September 30, 2016
shares(cumulative from the start of the
fiscal year)
Note: Dai Nippon Printing Co., Ltd. implemented a share consolidation in which two shares of common stock wereconsolidated into one share effective October 1, 2017. Accordingly, it has estimated the number of common shares
outstanding at end of each period, the number of treasury shares at end of each period, and average number ofshares outstanding during the period assuming this share consolidation was implemented at the start of the previous

consolidated fiscal year.

* These financial results are exempt from auditing.
* Explanation regarding appropriate use of earnings forecasts and other special notes
1. Forward-looking statements in this report, including earnings forecasts, are based on assumptions about
economic conditions, market trends, and other factors at the time the report was published. Actual results
may differ significantly due to a variety of factors.
For information about earnings forecasts, see the section titled, “1. Qualitative information on the
consolidated results for the current quarter (3) Explanation of the consolidated earnings forecasts,” on page4.
2. Dai Nippon Printing Co., Ltd. passed a resolution approving a share consolidation at the 123rd Ordinary
General Meeting of Shareholders on June 29, 2017. It implemented a share consolidation, from two sharesof common stock into one share, effective on October 1, 2017. Without the share consolidation, thedividend forecast and consolidated earnings forecast for the year ending March 31, 2018 would be as
follows.
(1) Dividend forecast for the year ending March 31, 2018
Year-end dividends per share¥16.00(2) Consolidated earnings forecast for the year ending March 31, 2018
Net income per share
Full year¥42.91

Contents
1. Qualitative information on the consolidated results for the current quarter ................. 2(1) Explanation of the consolidated financial results ........................................................ 2(2) Explanation of the consolidated financial position ...................................................... 3(3) Explanation of the consolidated earnings forecasts ................................................... 4
2. Quarterly consolidated financial statements and key notes............................................ 5(1) Quarterly consolidated balance sheets ........................................................................ 5(2) Quarterly consolidated statements of income and quarterly consolidated
statements of comprehensive income ......................................................................... 7
Quarterly consolidated statements of income
First six months of the fiscal years ........................................................................... 7
Quarterly consolidated statements of comprehensive income
First six months of the fiscal years ........................................................................... 8(3) Quarterly consolidated statements of cash flows ....................................................... 9(4) Notes regarding quarterly consolidated financial statements ................................. 11[Notes on premise of a going concern] ...................................................................... 11[Significant changes in shareholders’ equity] ........................................................... 11[Changes in accounting estimates] ............................................................................ 11[Segment information, etc.].......................................................................................... 121

1. Qualitative information on the consolidated results for the current quarter(1) Explanation of the consolidated financial results
Japan’s economy continued to gradually recover during the first six months of the fiscal year
ending March 2018, with corporate earnings and the employment environment improving, aided
by the economic policies of the Japanese government, and capital expenditures showing somesigns of picking up. However, the economy has still not reached a full-fledged recovery, affectedby a lack of strength in consumer spending due to an engrained budget mindset among
consumers and sluggish incomes, and by uncertain overseas economic conditions, including
slower economic growth in China and emerging markets.
The printing industry faced a tough business environment, due partly to lower demand forprinted media amid growth in e-books and online advertising, and an accompanying increase incompetition.
Under these circumstances, the DNP Group (DNP), based on the DNP Group Vision 2015
and the four growth areas of “Knowledge and Communication,” “Food and Healthcare,”“Lifestyle and Mobility,” and “Environment and Energy,” focused on creating new value throughP&I innovations as a combination of its strengths in printing and information and worked to
expand its business. It also implemented structural reforms to bolster competitiveness, including
the reorganization and consolidation of business divisions and group companies.
As a result, consolidated net sales for the first six months fell 1.4% year on year to ¥687.4
billion, consolidated operating income grew 45.2% to ¥16.9 billion, consolidated ordinary
income grew 32.7% to ¥19.1 billion, and net income attributable to parent company
shareholders swung to a loss of ¥21.4 billion (versus net income of ¥15.1 billion in the
year-earlier period).
Business segment results are presented below.
[PRINTING]
Information Communication
In the Publishing business, amid a continued slump in the publication market, DNP pursued
aggressive sales activities in Publishing & Media Services, but sales of books and magazines
both decreased year on year. In the Education and Publications Distribution business, DNP
focused on expanding business in the “honto” hybrid bookstore network that combines physicalbookstores, online bookstores, and e-book services. Sales were favorable for online bookstoresand e-books, and new accounts in library operations outsourcing services also increased.
However, sales in the Education and Publications Distribution business decreased from theprevious year as a result of switching BUNKYODO GROUP HOLDINGS CO., LTD. from a
consolidated subsidiary to an equity-method affiliate due to the partial sale of its stock in
October 2016. Overall sales in the Publishing business also decreased year on year.
In the Information Innovation business, sales decreased for advertising flyers, catalogs, andother printed media, but were strong for point-of-purchase promotional materials (POP) andother sales promotion tools. Moreover, sales were firm for Information Processing Services(IPS; handling data entry, printing, and shipment of personalized mail and other items), duepartly to an increase in Business Process Outsourcing (BPO) centers that perform a wide range
of operations for client companies, such as reception services for various applications andoperation of consumer contact points. Sales were also favorable for smart cards for financial
institutions and electronic money, and overall sales in the Information Innovation businessincreased from the previous year.
In the Imaging Communication business, DNP worked to provide high-value-added services
that allow consumers to enjoy photo printing, including “ShaGoo!” automated commemorative
photo booths and Imaging Mall as a cloud-based image sales solution. It also expanded
Southeast Asian and North American sales of dye-sublimation thermal transfer printing media
for photo printers (color ink ribbons and receiver paper). However, sales decreased in Japan2

and Europe, and overall sales fell below the previous year.
As a result of the above, overall segment sales fell 4.2% year on year to ¥379.3 billion, but
operating income grew 12.3% to ¥9.0 billion.
Lifestyle and Industrial Supplies
In the Packaging business, sales were firm for plastic molded products and for systems
including filling and packaging equipment. However, sales declined for paper and film
packaging, and overall sales decreased from the previous year.
In the Living Spaces business, DNP focused on expanding sales of environmentallyconscious products that use its proprietary electronic beam (EB) coating technology. Sales also
increased for Arttec interior and exterior aluminum panels and for decorative films featuringsophisticated designs such as wood grains and metals along with realistic texture effects, bothused in non-housing applications such as commercial facilities, offices, automobiles, andrailway cars. As a result, overall sales increased from the previous year.
In the Industrial Supplies business, sales of lithium-ion battery components were favorable
for both mobile and automotive applications, and overseas sales of photovoltaic module
components increased. As a result, overall sales increased from the previous year.
As a result of the above, overall segment sales fell 0.0% year on year to ¥193.2 billion andoperating income fell 25.3% to ¥5.2 billion.
Electronics
In the Display Components business, sales of LCD color filters decreased in both small- andmedium-sized filters for smartphones and tablets and large filters for TVs. However, sales werestrong for metal masks used in the production of organic light-emitting diode (OLED) displays.
Optical films had firm sales of mainstay anti-reflection films for LCDs and higher sales of films
for OLED displays. As a result, overall sales increased from the previous year.
In the Electronic Devices business, semiconductor photomask sales increased from theprevious year on uptake of domestic and overseas demand.
As a result of the above, overall segment sales grew 8.4% year on year to ¥90.9 billion andoperating income grew 130.7% to ¥13.8 billion.
[BEVERAGES]
Beverages
The soft drink industry continued to experience tough competition among manufacturers. In thisenvironment, DNP bolstered sales of core brands by releasing new products, and worked to
expand market share in existing markets and acquire new customers while leveraging area
marketing and operational expertise in the vending machine business.
As a result of these efforts, sales increased for the mainstay Coca-Cola brand and for
unsweetened tea drinks including Ayataka. However, sales decreased to group bottlers outside
the Hokkaido region. Mineral waters also declined. Overall segment sales fell 1.3% year on yearto ¥26.5 billion and operating income fell 19.6% to ¥0.7 billion.
(2) Explanation of the consolidated financial position
Total assets at the end of the second quarter increased by ¥11.6 billion from the end of theprevious fiscal year to ¥1,753.5 billion, due mainly to an increase in investment securities.
Total liabilities increased by ¥22.5 billion from the end of the previous fiscal year to ¥683.1
billion, due mainly to an increase in repair reserves.
Net assets decreased by ¥10.8 billion from the end of the previous fiscal year to ¥1,070.4
billion, due mainly to a decrease in retained earnings.
As a result of the above, the equity ratio changed from 59.4% at the end of the previous fiscal
year to 58.3%.
Consolidated cash flow provided by operating activities during the first six months totaled ¥22.0

3

billion, due mainly to ¥28.1 billion in loss before income taxes and non-controlling interests and¥53.5 billion in repair reserve provisions.
Cash flow used in investing activities totaled ¥1.2 billion, due mainly to ¥8.3 billion inproceeds from sales of property, plant, and equipment, ¥8.0 billion in proceeds from sales ofinvestment securities, and ¥18.4 billion in payments for purchases of property, plant andequipment. Cash flow used in financing activities totaled ¥38.9 billion, due mainly to an ¥8.9
billion decrease in debt, ¥15.0 billion for payments for purchases of treasury stock, and ¥10.1
billion in dividends paid.
As a result, cash and cash equivalents at the end of the second quarter totaled ¥197.4 billion,a decrease of ¥17.0 billion from the end of the previous fiscal year.
(3) Explanation of the consolidated earnings forecasts
Our earnings forecasts for the fiscal year ending March 2018 are unchanged from the forecasts
announced on May 12, 2017.

4

2. Quarterly consolidated financial statements and key notes(1) Quarterly consolidated balance sheets(Million yen)
As of March 31, 2017

As of September 30, 2017

ASSETS
Current assets
Cash and time deposits
Notes and trade receivables
Merchandise and finished products
Work in progress
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures, net
Machinery and equipment, net
LandConstruction in progress
Other, net
Total property, plant and equipment
Intangible fixed assets
Other
Total intangible fixed assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
TOTAL ASSETS

5

210,454341,805
84,28629,13023,89649,194(1,627)
737,140

193,987
337,604
84,96233,14823,50344,127(1,494)
715,838

206,196
80,689155,114
18,326
36,839497,166

203,026
79,591
153,525
13,02536,805
485,974

34,43634,43633,20633,206

380,323
96,894(4,057)473,160
1,004,763
1,741,904

428,809
93,378(3,614)
518,573
1,037,753
1,753,592

(Million yen)
As of March 31, 2017

As of September 30, 2017

LIABILITIESCurrent liabilities
Notes and trade payables
Short-term bank loans

247,562
43,035

241,270
33,570Reserve for bonuses

17,056

16,706

Repair reserve

18,67925,685

Other

88,864

93,471

Total current liabilities

415,198

410,704

109,640

107,520

Long-term debt

8,658

8,647

Repair reserve–

27,911

Net defined benefit liability

35,14936,058Deferred tax liabilities

66,14767,401

Other

25,82324,894

Total long-term liabilities

245,418

272,433

660,617683,137

Common stock

114,464

114,464

Capital surplus

144,280

144,269

Retained earnings

695,720642,706

Treasury stock(69,636)(62,897)

Total stockholders’ equity

884,829

838,542

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Net deferred gains (losses) on hedges

149,574

182,809(2)

6Foreign currency translation adjustments(2,219)(591)

Remeasurements of defined benefit plans
Total accumulated other comprehensive
income

1,683

1,549

149,035

183,775

47,422

48,136TOTAL NET ASSETS

1,081,286

1,070,454

TOTAL LIABILITIES AND NET ASSETS

1,741,904

1,753,592

Long-term liabilities
Bonds

TOTAL LIABILITIESNET ASSETSStockholders’ equity

Non-controlling interests6(2) Quarterly consolidated statements of income and quarterly consolidated statementsof comprehensive income
Quarterly consolidated statements of income
First six months of the fiscal years(Million yen)Six months ended
September 30, 2016
697,492

Six months ended
September 30, 2017
687,498

Cost of sales

566,862554,354

Gross profit

130,630

133,143

Selling, general and administrative expenses

118,958

116,195

Operating income

11,671

16,947

3,931
1,381
3,074
8,387

3,551
1,388
2,597
7,537

1,155
1,309
3,201
5,666

1,117
415
3,846
5,378

14,392

19,106769
40,277
136
41,183

2,035
6,238
132
8,407

1,359
30,218484
32,062

1,981
53,500210
55,691

23,514(28,178)

8,419(1,875)
6,543
16,971

7,130(15,270)(8,139)(20,038)

1,828

1,390

15,142(21,428)

Net sales

Non-operating income
Interest and dividend income
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expense
Interest expense
Foreign exchange transaction loss
Other
Total non-operating expenses
Ordinary income
Extraordinary gains
Gain on sale of fixed assets
Gain on sale of investment securities
Other
Total extraordinary gains
Extraordinary losses
Loss on sale or disposal of fixed assets
Repair costs and repair reserve provisions
Other
Total extraordinary losses
Income (Loss) before income taxes andnon-controlling interests
Current income taxes
Deferred income taxes
Total income taxes
Net income (loss)
Net income attributable to non-controllingshareholders
Net income (loss) attributable to parent company
shareholders

7

Quarterly consolidated statements of comprehensive income
First six months of the fiscal years(Million yen)

Net income (loss)
Other comprehensive income
Valuation difference on available-for-salesecurities
Net deferred gains on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income ofaffiliates accounted for using equity method
Total other comprehensive income
Comprehensive income
Attributable to：Parent company shareholders
Non-controlling shareholders

8

Six months ended
September 30, 2016

Six months ended
September 30, 201716,971(20,038)(11,709)

33,153

7(10,899)
563

17
236
(641)

(3,064)

1,812(25,101)(8,130)34,578
14,539(8,789)659

13,311
1,228

(3) Quarterly consolidated statements of cash flows(Million yen)

Cash flows from operating activities
Income (Loss) before income taxes andnon-controlling interests
Depreciation
Decrease of doubtful receivables, net(Increase) Decrease of net defined benefit asset
Increase (Decrease) of net defined benefit liability
Equity in gains of affiliates
Amortization of consolidation goodwill, net
Interest and dividend income
Interest expense
Net gains on sales of investment securities
Net losses on devaluation of investment securities
Net (gains) losses on sales or disposal of fixed
assetsRepair costs
Repair reserve provisions
Decrease in trade receivables
Increase in inventories
Decrease in trade payables
Other
Sub-total
Payments for repair costs
Payments for extra retirement payments
Payment of income taxes
Net cash provided by operating activities
Cash flows from investing activities
Net increase in time deposits
Payments for purchases of property, plant andequipment
Proceeds from sales of property, plant andequipment
Payments for purchases of investment securities
Proceeds from sales of investment securities
Payments for purchase of intangible fixed assets
Interest and dividends received
Other
Net cash provided by (used in) investing activities

9

Six months ended
September 30, 2016

Six months ended
September 30, 2017

23,514(28,178)

30,078
(385)
149
(665)
(1,381)
1,157(3,931)
1,155(40,180)
94

29,145(622)(2,524)554(1,388)1,153(3,551)
1,117(6,179)
109

619

(27)

5,793
24,42422,548(4,904)(9,985)
7,045–
53,5003,776(4,143)(7,282)
9,572

55,148(9,883)(104)(4,002)
41,15845,030(18,583)(26)(4,328)22,092(10,188)(24)(27,395)(18,410)

3,122

8,398

(277)
46,170(6,073)
6,043
1,058
12,460(808)
8,023(4,931)
5,247
1,237(1,266)

(Million yen)

Cash flows from financing activities
Net decrease in short-term bank loans
Proceeds from long-term debt
Repayments of long-term debt
Payments for redemption of bonds
Payments for purchases of treasury stock
Payments for purchases of treasury stock ofsubsidiaries
Interest paid
Dividends paid
Dividends paid to non-controlling interests
Payments for purchase of stock in subsidiaries not
resulting in change in scope of consolidation
Other
Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents resulting fromthe merger of non-consolidated subsidiaries
Cash and cash equivalents at end of period10

Six months ended
September 30, 2016

Six months ended
September 30, 2017(13,375)
6,380(4,940)(495)(15,016)(9,467)2,650(2,103)(120)(15,025)(0)(0)(1,168)(10,063)(250)(1,124)(9,853)
(302)

–

(220)

(1,806)(3,361)(40,735)(38,929)(4,313)

838

8,569

(17,264)

175,513214,564–

184

184,082

197,483(4) Notes regarding quarterly consolidated financial statements[Notes on premise of a going concern]
None[Significant changes in shareholders’ equity]
Treasury stock increased by ¥15,025 million during the first six months of the current fiscal year,
due mainly to share repurchases based on a resolution passed by the Board of Directors on
May 12, 2017.
Additionally, retained earnings decreased by ¥21,763 million and treasury stock decreasedby ¥21,763 million during the first six months of the current fiscal year due to the cancellation oftreasury stock on May 26, 2017 based on a resolution passed by the Board of Directors on May
12, 2017.
[Changes in accounting estimates](Repair reserves)
DNP previously recorded repair reserves to cover the expected required repair costs for defects
in some products, but because it was able to obtain new and more accurate information about
the products subject to repair, it changed its estimate for the first six months of the fiscal year
ending March 2018.
As a result, income before income taxes and non-controlling interests decreased by ¥53.5
billion for the first six months of the fiscal year ending March 2018.

11

[Segment information, etc.]
I. First six months of previous fiscal year (April 1, 2016 – September 30, 2016)
Information on sales and income/loss by reporting segment
Reporting segment(Million yen)Amounts
reported on
Adjustment
quarterly
Note 1
consolidated
statements ofNote 2incomeInformation
Communication

Lifestyle andIndustrial
Supplies

Electronics

393,783

192,976

83,82826,904

697,492–

697,492

Inter-segment

2,383

285

–

25

2,694

(2,694)–

Total

396,166

193,262

83,82826,929700,187(2,694)

697,492

Segment income

8,071

7,033

5,991

897

21,994(10,322)

11,671

Beverages

Total

Net sales
Outside customers

Notes: 1. Segment income is adjusted for costs related to basic research not assignable to a reporting segment
or costs of research shared by different segments.
2. Segment income is adjusted to reflect operating income as reported on the quarterly consolidated
statements of income.

II. First six months of current fiscal year (April 1, 2017 – September 30, 2017)
Information on sales and income/loss by reporting segment
Reporting segment(Million yen)Amounts
reported on
Adjustment
quarterly
Note 1
consolidated
statements ofNote 2incomeInformation
Communication

Lifestyle andIndustrial
Supplies

Electronics

377,646

192,395

90,892

26,563

687,498–

687,498

Inter-segment

1,734

856

9

5

2,605

(2,605)–

Total

379,381

193,252

90,901

26,568690,104(2,605)

687,498

Segment income

9,063

5,256

13,821721

28,863(11,915)

16,947

Beverages

Total

Net sales
Outside customers

Notes: 1. Segment income is adjusted for costs related to basic research not assignable to a reporting segment
or costs of research shared by different segments.
2. Segment income is adjusted to reflect operating income as reported on the quarterly consolidated
statements of income.

12