CMK CORPORATION（Stock code: 6958）

FY 2017 Financial Results(presentation material)
May 22, 2018
CMK CORPORATION

1Contents
１．Consolidated financial results for FY 2017
２．Consolidated financial forecast for FY 2018
３．Trends of Automotive PWB market

４．Medium-Term Management plan
５．Supplementary material2１. Consolidated financial resultsfor FY 20173

Consolidated financial results for FY 2017

①Key points of FY 2017 Financial results
 Orders of our key products, PWBs forautomotive use, increased significantly, driven
by the progress of automotive electrification
 Profitability improved, as a result of reflecting
the impact of production capacity
enhancements and productivity improvements
implemented in parallel in factories（Billions of yen）
90

86.8

4.2
80

73.0

75.3
2.6

70

 Despite the impact of a rise in material prices, 60
operating profit margin improved up to around
4.9%

0.3

50

0

FY 2015

FY 2016

FY 2017

Results

Results

Results

Sales

Operating income4Consolidated financial results for FY 2017

②Consolidated Income Statement（Billions of yen）

YoY

Compared with plan

FY 2016
Results

FY 2017
Results

Net sales

75.3

86.8

+11.5

+15.3%

80.0+6.8

Operating income

2.6

4.2

+1.6

+60.9%

4.0

+0.2

3.5%

4.9%

+1.4%

5.0%

-0.1%

Ordinary income

2.6

3.9

+1.2

+49.0%

3.7+0.2

Profit attributable toowners of parent

2.1

3.6

+1.4

+69.0%

3.0

+0.6

4.5%

7.2%

+2.7%

6.1%

+1.1%

109.28112.04+2.76

110.00+2.04

Operating margin

ROE
Exchange rate
(USD/JPY)

Change

%

+2.5%

Plan

Change5

Consolidated financial results for FY 2017

③Sales by application（Billions of yen）

Car electronics
FY 2017

AV equipment Digital still camera
Mobile communications
Amusement Others

2.5 2.2
0.9 3.1

62.5

Results
車載売上高

15.5

86.8

FY 2017 Plan：58.1（計画）

Car electronics
FY 2016

AV equipment Digital still camera
Mobile communications
Amusement Others
2.9 2.4

53.1

Results

0.0

10.0

20.0

30.0

0.7 2.0

40.0

50.0

60.0

13.9

70.0

75.3

80.0

 Sales of products for automotive use exceeded our target planned in the beginning of
FY2017, driven by the progress of automotive electrification
 Orders of products for popular game equipment use contributed to increase sales in theamusement sector

90.0

6

Consolidated financial results for FY 2017

④Enhancing overseas production capability
Capability enhancements in FY2017 (reproduced - Presentation material of 1H FY2017 Results)

ThailandCMK Corporation(THAILAND) co., ltd.
(Double-sided PWBs, Multilayered PWBs, HDI PWBs)
・ Order intake mainly of products for automotive use
remains strong
・ In the end of September, enhanced production capacity by
30% compared with the previous fiscal year
(acceleration of the initial schedule)

China

CMK electronics(WUXI) co., ltd.
(HDI PWBs）
・ HDI PWBs adopted in products for automotive use increased
・ In the end of June, enhanced production capacity by
30% compared with the previous fiscal year

CMKC (Dong Guan) ltd.
(Double-sided PWBs, HDI PWBs）
・ The factory manufacturing products for automotive use
being operated continuously at full capacity7Consolidated financial results for FY 2017

⑤Improving domestic productivity
Changes in Japan profit and loss

 Downsized domestic production sites
in 1H FY2016
 Launched a project to enhance productivity
mainly in Niigata factory since 2H FY2016
 With manufacturing operation continued
at full capacity, domestic operating profit
margin improved up to 5.6% exceeding the
average in CMK, helped by cost reduction
per unit

Operating margin

30
0
25

2.7%

4.9%

3.5%
26.0

25.6

23.5

18
15
12
9
26
3
25.4
0
1.4 2

5.6%

1.2

20
15

1
1

0.8

0.6
10

1

5

0

0

0
1H FY 2016 2H FY 2016 1H FY 2017 2H FY 2017
Results

Results

Sales

Results

Operating income

Results8

Consolidated financial results for FY 2017

⑥Analysis of changes in operating income（Billions of yen）

Decreased sales prices andIncreased productivity increased material prices etc.
Profit increase
due to sales growth

1.0
▲2.2

Streamlining ofbusiness operations

2.5

0.2

4.2
2.6
0.0

FY 2016

FY 2017

Operating income

Operating income(Results)(Results)

9

Consolidated financial results for FY 2017

⑦Cash dividends■Basic policy
Continue to pay stable dividends in light of our financial results andperformance, while securing sufficient internal reserves we need toreinforce our management structure and expand our business further■Cash dividends
FY 2017 Annual dividends per share（Yen）

Annual dividends

10.0

10Yen

6.5

5.0
2.5

2.5
0.0

0.0

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 201710

２. Consolidated financial forecast
for FY 201811

Consolidated Financial forecast for FY 2018

①Key points of FY 2018 forecast（Billions of yen）

 Demand for products for automotive use is
expected to remain strong, driven by the
progress of automotive electrification

90.0
90

86.8

4.2

80
 However, the continuing trend of a strong
Chinese yuan and Thai baht against US dollar is
expected to affect our profit adversely

4.0

75.3

2.6

70

 Operating profit is expected to decline due to arise in material prices likely to continue for thetime being as a result of tight supply-demand 60

50

0

FY 2016

FY 2017

FY 2018

Results

Results

Forecast

Sales

Operating income

12Consolidated Financial forecast for FY 2018

②Consolidated Income Statement（Billions of yen）

FY 2017
ResultsYoY

FY 2018
Forecast

Change%Net sales

86.8

90.0

+3.1

+3.6%

Operating income

4.2

4.0

-0.2

-6.2%

4.9%

4.4%

-0.5%

Ordinary income

3.9

3.7

-0.2

-5.5%

Profit attributable toowners of parent

3.6

3.0

-0.6

-17.5%

112.04110.00

-2.04

-1.8%

Operating margin

Exchange rate
(USD/JPY)

13

Consolidated Financial forecast for FY 2018

③Sales by application（Billions of yen）

Car electronics
FY 2018

AV equipment Digital still camera
Mobile communications
Amusement Others
2.4 1.9

67.7

Forecast

1.2

Car electronics
FY 2017

AV equipment Digital still camera
Mobile communications
Amusement Others
2.5 2.2

62.5

Results

0.0

10.0

20.0

30.0

0.9 3.1

40.0

900

13.0

3.5

50.0

60.0

70.0

15.5

868

80.0

90.0

 Sales of products for automotive use are expected to remain strong and increase by
8.3% compared with the previous fiscal year, driven by the progress of automotive
electrification

14

Consolidated Financial forecast for FY 2018

④CMK Thailand – Factory expansion
Capability enhancements from FY 2018 to FY 2019 (February 28, release)

CMK Corporation(THAILAND) co., ltd.
• Demand for automotive PWBs is expected to grow further, driven by the automotive
electrification• Expansion of the factory was decided to ensure further profit increase by keeping up with
globally growing demand for automotive PWBs
現有敷地
Prachinburi, Thailand（304 industrial park）
Location

Business contents
Investment
amountDouble-sided PWBs, Multilayered PWBs, HDI PWBs
About 5 billion yen

Operation start

Phased operation start from December 2018 (plan)

Production
capacity after
expansion

Increase by approximately 25% compared with thepresent status

15

Consolidated Financial forecast for FY 2018

⑤Analysis of changes in operating income（Billions of yen）

Increased productivity
Profit increase
due to sales growth

Exchange
fluctuation

1.3

▲0.8

Decreased sales prices andincreased material prices etc.

▲2.0

1.2
Exchange rate

4.2

0.0

FY 2017
Results

FY 2018Plan%

USD/JPY

112.04110.00-1.8%

RMB/JPY

16.63

17.00

+2.2%

THB/JPY

3.32

3.40

+2.4%

USD/RMB

6.74

6.47

-4.0%

USD/THB

33.75

32.35

-4.1%

4.0

FY 2017

FY 2018

Operating income

Operating income(Results)(Forecast)
16

３．Trends of Automotive PWB
market17

Trends of Automotive PWB market①Trends of Automotive PWB market
Social Environment

Automotive industry

Economic growth of
emerging countries

Increase of global production volume

Strengthening of fuelefficiency regulation

Aging society

Strong demand for
comfortability

Next-generation automobiles (xEV)
Technology innovation

Shortage of workers

Electric components
industry

Advanced driver assistance system (ADAS)

Increasing
demand forelectric
components

Automated driving

Connected car
18

Trends of Automotive PWB market②Trends of market expansion
 Forecast of ECU sales volume

USA: Inter-vehiclecommunications become
mandatory in new cars from2023 (plan)

Breakdown of ECU increase※our calculation(2016: 2.1 billion ⇒ 2025: 4.4 billion units)

Progress of electrification+1.7 billion units(incl. Growing popularity of Next-generation Automobiles)

Expansion of ADAS

4.4 billion units

Increase of automobile production +0.5 billion units

Total+2.2 billion units

Growing popularity of next
generation automobiles

3.9 billion units
3.1 billion units
Smart sensor / Actuator
Information and Communication ECU

2.1 billion units

Body Electronics ECU

Annual sales
volumeDriving Control and Safety ECU
HV/PH/EV/FCV ECUPowertrain ECU

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Results

Prospect

Forecast

Forecast

Forecast

Forecast

Forecast

Forecast

Forecast

Forecast※Source：prepared by CMK reference to Fuji Chimera Research [Comprehensive Study of In–Vehicle Electronic Devices & Components 2018]

19

Trends of Automotive PWB market③Prospect of Automotive PWB market
Market scale forecast of rigid PWBs for automotive use（Billions of yen）

817

800

718

2025 Forecast

105

15%

8% 2%

Market scale

535

HDI

44
400

1%

13%

80
600

（Composition ratio）

Multilayered
510

584

17%

2016 Results

Double-sided
Single-sided

388
200

0

92
10
2016

118

119

9
2021

7
2025

results

Forecast

Forecast

73%
71%※Source：prepared by CMK reference to Fuji Chimera Research [Comprehensive Study of In–Vehicle Electronic Devices & Components 2018]20

Trends of Automotive PWB market④Trends of Automotive PWBs
Scope of our business
Required reliability

Powertrain/Driving control and Safety※Headlamp, mater panel,
Mirror Control, Power seat etc.

Single-sided

Double-sided※IVI System(In-Vehicle Infotainment System)

Multilayered

HDI

Value-added Products

Navigation・
IVI System

HDI PWBs used for Powertrain
ECU increased, as microcomputers
contain more pins than everWith the spread of ADAS, HDI
PWBs are used for Driving control
and Safety ECU in millimeter wave
radar and car camera which
require real-time processing※Engine Management System, Inverter, Brake Control System,
Electric Stability Control, ADAS(millimeter wave radar･car camera) etc.

Body electronics・
Climate Control

Use of HDI PWBs

Growing demand forreliability
Demand for reliability became
stronger, driven by the spread ofconnected cars and autonomous
driving21

４．Medium-Term Management plan

22

Medium-Term Management plan<FY 2015- FY 2017>①Review of the Medium-Term Management Plan(summary)

Sales

Profit

Sales fell short of our plan due to the unachieved sales in the
consumer sector and the Yen’s appreciation

Sales in our key automotive sector exceeded our forecast,driven by accelerating automotive electrification

Profitability improved, as a result of our efforts to downsize
production sites and promote productivity in Japan and toenhance overseas production capacity

Product mix improved, helped by increase in sales of HDI PWBs

Despite such a negative factor as rising material prices,
operating profit margin increased to 4.9% and ROE to 7.2%

23

Medium-Term Management plan<FY 2015- FY 2017>②Review of the Medium-Term Management Plan(Consolidated Income Statement)（Billions of yen）

Medium-term Management plan
（May 25, 2015 release）

Results

FY 2015

FY 2016

FY 2017

FY 2015

FY 2016

FY 2017

Net sales

75.0

82.0

90.0

73.0

75.3

86.8

Operating income

1.5

2.5

4.5

3.8

2.6

4.2

2.0％

3.0％

5.0％

0.5％

3.5％

4.9％

0.7

1.6

3.0

▲8.1

2.1

3.6

1.2％

2.9％

5.0％

▲15.9％

4.5％

7.2％

115.00115.00115.00121.04109.28112.04

Operating margin

Profit attributable toowners of parent
ROE
Exchange rate
(USD/JPY)24

Medium-Term Management plan

③Present issues
Chance

Risk

Issue



Demand in the automotive PWB market is expected to increase drasticallyafter 2020

The environment surrounding our business is expected to be getting morecompetitive because a further rise in material prices and more intensecompetition with overseas companies are anticipated

We are required to deliver incomparable quality and reliability as well as
cost competitiveness to survive more competitive environmentWe need to restructure our manufacturing and business process byreviewing them with zero-based thinking

25Medium-Term Management plan

④Positioning of FY2018 in the Medium-Term Management Plan

Positioning of FY2018①

Review the whole business process thoroughly and promptly under the new
management team started on 1st April (facilities, value-chain and corporate
function）②

Work out a program for restructuring of our production facilities, manufacturing
process and sales organization, and a long-term vision not confined to organic
growth③

Commence investments and reforms based on the restructuring program

A new Medium-Term Management Plan we initially planned toannounce in May will be released later this year26

５．Supplementary material27Supplementary material①Promote ESG management
Environment

Society

Governance

Carbon-Dioxide emission reduction, Water consumption＜Note＞
reduction, Resource recycling, and Renewal withIn July 2018, theenergy-saving
current ‘CSR Report’
Diversity and inclusion, and Promotion of work-lifebalanceEnhancement of group management , Information
disclosure in English, and Appointment of two
independent outside directors

will be renewed andissued as ‘CMK Report’.
We will keep our
stakeholders informedof our various activities
through easy-tounderstand reading.

Carrying forward the management focused on ESG toenhance the value of our company over a long period28Supplementary material②Sales by type of PWBs
（Billions of yen）

FY 2016
Results

FY 2017
Results

YoY
ChangeFY 2018
Forecast

YoY
ChangeHDI PWBs

21.8

26.9

+5.0

30.4

+3.5

Multilayered PWBs

31.9

37.0

+5.1

39.2

+2.1

Double-sided PWBs

14.2

15.2

+0.9

14.9

-0.2

7.2

7.6

+0.3

5.3

-2.3

75.3

86.8

+11.5

90.0

+3.1

OthersTotal

29

Supplementary material③Financial results by region（Billions of yen）

FY 2016
Results
Sales

OperatingincomeFY 2017
Results
Sales

OperatingincomeFY 2018
Forecast

YoY
Sales

OperatingincomeSales

OperatingincomeYoY
Sales

Operatingincome

Japan

49.1

1.5

52.6

2.6

+3.4

+1.1

50.7

1.9

-1.9

-0.7

China

22.7

0.9

29.0

1.2

+6.2

+0.2

30.7

1.4

+1.7

+0.2

Southeast Asia

16.9

0.4

21.4

0.2

+4.4

-0.1

22.9

0.6

+1.5

+0.3

Europe &North America

5.3

0.2

6.6

0.4

+1.2

+0.1

8.0

0.3

+1.4

0

Total

94.2

3.2

109.7

4.5

+15.5

+1.3

112.5

4.4

+2.7

-0.1

Adjustment▲18.9▲0.5 ▲22.8

▲0.3

-3.9

+0.2

▲22.5

▲0.4

+0.3

0

Consolidated

75.3

4.2

+11.5

+1.6

90.0

4.0

+3.1

-0.2

2.6

86.8

30

Supplementary material④Capital investment（Billions of yen）

FY 2016
Results

FY 2017
Results

YoY
ChangeFY 2018
Forecast

YoY
Change

Japan

1.7

1.5

-0.2

2.8

+1.3

Overseas

2.8

5.4

+2.6

7.1

+1.6

Consolidated

4.6

7.0

+2.4

10.0

+3.0

Depreciation
cost

4.1

4.1

0

4.6

+0.5
31

Future-related information and descriptions in this material are justforward-looking statements and not guarantees for future achievements(Amounts are rounded down, and % is rounded to one decimal place.)

END

32