CMK CORPORATION（Stock code：6958）

FY 2015 Financial Results(presentation material)

May 26, 2016
CMK CORPORATION

1Contents■Financial results for FY2015
1. Overview
2. Sales
3. Streamlining business operations
4. Profits
5. Capital investment
6. Financial position

・・・ P.4
・・・ P.6
・・・ P.7
・・・ P.11
・・・ P.14
・・・ P.15■Financial forecast for FY2016
1. Overview
2. Sales
3. Profits
4. Capital investment

・・・ P.17
・・・ P.19
・・・ P.20
・・・ P.22■Medium-Term Management plan
1. Summary
2. Progress of the objectives

・・・ P.24
・・・ P.27
2

Financial Results for FY 2015
(Year ended March 31, 2016)3

1. Overview-①Summary











CMK have restructured our business mainly in Japan and reduced our
fixed costs.
However, operating loss was recorded in the first half of the fiscal year,
mainly due to the insufficient domestic streamlining measures andsudden changes in the situation of overseas order intake.
We decided to take the domestic streamlining measures proposed in theMedium-Term Management Plan ahead of schedule, and carried out
downsizing of production sites and a voluntary retirement program.
We optimized the structure of our overseas production sites.
As a result of the above efforts, we have succeeded in making profit
steadily since the third quarter, securing operating profit for the full year.

41. Overview-② Consolidated Financial Results■Consolidated Financial Results（Millions of Yen）

FY 2014（Results）

FY 2015（Results）

YoY
ChangeYoY%

73,73073,098

-632

-0.9%

Operating income

641

381

-260

-40.5%

Ordinary income

1,513

▲628

-2,141－

Profit attributableto owners ofparent1,178▲8,122-9,300－Sales

Exchange rate in FY 2014:1USD=106.45 yen, 1EUR=140.31 yen
Exchange rate in FY 2015:1USD=121.04 yen, 1EUR=133.66 yen

52. Sales by application(Hundred Millions of Yen）

Car electronics

FY2015(Results)

AV equipment Digital still camera
Mobile communications
Amusement
Others

500

146

730

145

737

27 24
9 22

FY2014(Results)

485
30

0




100

200

300

400

27
14 33

500

600

700

Sales of products for automotive use increased compared with previous fiscal year, helped by strong
demand in the North American market.
Sales of products for digital camera use decreased compared with the previous fiscal year due to thedecline in demand.
Sales of products for amusement use decreased compared with the previous fiscal year due to thedecline in demand for game equipment.

800

6

3. Streamlining business operations-①
Downsizing of domestic production sites① Downsizing of domestic production sites
 Stop production of 2 factories in Gunma prefecture by the end of September 2016.
 Transfer products to domestic and overseas group factories accordingly.
 Implement employee relocation and voluntary retirement programs.

G Station Factory

KIBAN Center FactoryFoundation

February, 1974

December, 1986

Location

Shiba-machi, Isesaki-shi
Gunma

Toyazuka-machi, Isesaki-shi
Gunma

35,394㎡

47,348㎡

173

371

Area
Number of employees（Year ended March, 2015）
Business contents
Major use

Build-up PWBs, RF, Multilayered PWBs,
Double-sided PWBs
Car electronics, Amusement73. Streamlining business operations-①
Downsizing of domestic production sites■Relocated main production sites
Niigata Factory
Kanbara Factory

China Wuxi
China Dong Guan

G Station Factory
KIBAN Center Factory

Chichibu Factory
ThailandCMK PRODUCTS
CORPORATION••

Relocated production sites mainly to Niigata area.
Secured sustainable profitability by enhancing factory operation efficiency.
83. Streamlining business operations-②
Voluntary retirement program② Voluntary retirement program Eligibility: An employee who is at least age 40 with 3 or more yeas of service
 Availability: For around 200 employees Application period: November 2, 2015 - November 13, 2015
 Retirement date: December 31, 2015
 Benefits: - Special retirement fee for each applicant as in the case of
involuntary retirement- Support for re-employment

Results of the program• Number of applicants: 247 employees• Outcome of the labor cost reduction: 15 hundred million yen/year9

3. Streamlining business operations-③
Impact of measures■ Annual profit improvements through streamlining measures (Plan)
Reduction in labor costs
Reduction in depreciation expenses
Additional costs
Total＋15 hundred million yen＋ 4 hundred million yen▲ 1 hundred million yen＋18 hundred million yen⇒ Profit increased in the FY 2015: ＋5 hundred million yen■ Improved profit in the FY 2015 (Results)（Hundred Millions of Yen）

FY20153Q

FY20154Q

FY2015Results

FY2015
Plan

Reduction in labor costs

－

2.6

2.6

3.7

Reduction in depreciation
expenses

1.4

1.4

2.8

2.8

Others (incl. additional costs）

0.0

▲0.6

▲0.7

▲ 1.3

Total

1.4

3.4

4.8

5.2

10

4. Profits-① Quarterly changes■ Changes in quarterly consolidated profit and loss
Japan
Sales

7.0
6.0
5.0
4.0
Operatingincome 3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0

173

181

190

193

175

（Hundred Millions of Yen）
Overseas
Adjustment
184

185

187
6.0

Overseas

1.1
2.8
3.2
0.4
1.0
0.5

FY2014
1Q

1.3

1.3

1.4

1.7

1.9

2.1

0.6

0.2

2Q

3Q

4Q

Decreased due to a sharp decline inorders in Japan and overseas

1.4

Japan

5.3
2.6

▲2.8
▲ 0.9
▲ 0.5

▲2.2
▲ 0.4
▲ 0.5

FY2015
1Q

2Q

3Q

4Q

In Japan: Streamlined business operations
Overseas: Improved productivity

11

4. Profits-② Financial Results by region（Hundred Millions of Yen）

FY2014 (Results)
Sales

OperatingincomeFY2015 (Results)
Sales

OperatingincomeYoY Change
Sales

Operatingincome

Japan

477

3.3

467

6.6

-10

+3.3

China

229

5.6

225

▲ 0.9

-4

-6.5

Southeast Asia

143

▲ 1.7

160

0.0

+17

+1.7

EU & USA

49

2.1

55

2.3

+6

+0.2

Total

899

9.3

908

8.1

+9

-1.2

Adjustment

▲ 162

▲ 2.9

▲ 177

▲ 4.3

-15

-1.4

Consolidated

737

6.4

730

3.8

-7

-2.6

•
•
•

In Japan, profit increased compared with the previous fiscal year, reflecting the impact of thestreamlined business operations.
China made a loss in the full year, affected by the loss due to a sharp decline in orders in the first half.
In Southeast Asia and Europe, operating income increased compared with the previous fiscal year,
helped by strong demand for products for automotive use in the North American market.
12

4. Profits-③
Non-operating expenses・Extraordinary losses■Non-operating expenses• Due to fluctuations in foreign currency exchange rate, foreign exchange
losses of 733 million yen relative to receivables and payables
denominated in foreign currencies are recorded.

■Extraordinary losses• In connection with the downsizing of domestic production sites and a
voluntary retirement program, impairment loss on fixed assets of 4,182
million yen and business restructuring costs of 2,833 million yen arerecorded as extraordinary losses respectively.

13

5. Capital investment（Hundred Millions of Yen）

FY 2014(Results)
Japan

21

FY 2015(Results)

12

YoY
ChangeNotes-9Reduced capital investment
in view of the profit and loss

Invested to improve
productivity and quality

Overseas

24

18

-6

Consolidated

45

31

-14

Depreciation
expenses

49

49

0
14

6. Financial Position（Hundred Millions of Yen）

FY 2014(Results)

FY 2015(Results)

YoY
ChangeCash anddeposits

145

215

+70

Interest-bearing
liabilities

187

224

+37

Shareholder'sequity

559

465

-93

Total assets

991

905

-86

Equity ratio

56.4％

51.4％

-5.0％

•
•

Shareholder's equity decreased due to extraordinary losses.
Additional funds of 60 hundred million yen was raised to invest for growth.
15

Financial Forecast for FY 2016
(Year ended March 31, 2017)16

1. Overview-①Summary• CMK continues to improve profitability in Japan through streamlining
measures.
• We continue our focus on quality improvement to increase profitability
in the overseas market, while enhancing factory capacity in Thailand
where we can expect increasing orders.
• With respect to sales, we intend to expand sales of products for
Advanced Driver Assistance Systems (ADAS), which is expected to
become more popular, while responding to strong overseas demand for
products for automotive use.

17

1. Overview-② Consolidated Financial Results■Consolidated Financial Results
FY 2015（Results）

FY 2016（Forecast）（Millions of Yen）

YoY
ChangeYoY％

73,09877,000＋3,902

5.3％

Operating income

381

2,500

＋2,119555.1％

Ordinary income

▲628

2,100

＋2,728－

Profit attributableto owners ofparent▲8,122

1,600＋9,722－

Sales

Assumed exchange rate in FY 2016:1USD=115 yen, 1EUR=125 yen

18

2. Sales by application(Hundred Millions of Yen）

Car electronics

FY2016(Forecast)

AV equipment
Mobile communications

Digital still camera
Amusement
Others

528

142
35

FY2015(Results)

16

24

770

24

500

730

146
27 24
9 22

0

100

200

300

400

500

600

700

800

・ Sales arising mainly from products for automotive use are expected to increase, as a resultof the widespread use of products for ADAS and by responding globally to the demand for
products for automotive use.
19

3. Profits-① Analysis of changes in operating income(Hundred Millions of Yen）

50
40

Improved yields
Increased productivity
Profit increase due
to sales growth30
20

Streamlining
business operations

10
0

11

14

6

▲10
Decreased sales prices
Cost reduction
etc

25

4
FY2015Results

FY2016
Forecast

20

3. Profits-② Financial forecast by region(Hundred Millions of Yen)

FY 2015（Results）
Sales

OperatingincomeFY 2016（Forecast）
Sales

OperatingincomeYoY Change
Sales

Operatingincome

Japan

467

6.6

468

15.7

+1

+9.1

China

225

▲ 0.9

236

9.4

+11

+10.3

Southeast Asia

160

0.0

206

4.5

+46

+4.5

EU & USA

55

2.3

59

2.2

+4

-0.1

Total

908

8.1

970

31.8

+62

+23.7

Adjustment

▲ 177

▲ 4.3

▲ 200

▲6.8

-23

-2.5

Consolidated

730

3.8

770

25.0

+40

+21.2

•
•
•

In Japan, operating income is expected to increase, although sales remains on the same level, reflecting
the impact of the streamlined business operations.
In China, sales and operating income are expected to increase, arising mainly from the products forautomotive and amusement uses.
In Southeast Asia and Europe, sales and operating income are expected to increase, arising mainly fromproducts for automotive and AV equipment uses.

21

4. Capital investment（Hundred Millions of Yen）

FY 2015
FY 2016（Results） （Forecast）

Japan

12

22

YoY
ChangeNotes+10Overseas

18

30

+12

Consolidated

31

53

+22

12 hundred million yen toenhance factory capacity in
Thailand

Depreciation
49
46-3
expenses・ Capital investment is expected to increase by 22 hundred million yen, or 70%, to 53 hundred million yen in
FY2016 compared with FY2015, focusing on the investments to enhance our production capacity andimprove the quality.

22Medium-Term Management Plan

23

1. Summary-① Our Medium-Term strategy■Our Medium-Term strategy◆A growing CMK to deliver sustainable growth bytransforming our solid business strategy◆Getting an advantage to better compete in the automotive
PWB market■Key objectives◆Increase sales in the market for products for automotive
and communication devices.
Growth in the overseas market.
◆Enhance production capacity◆Strengthen cost competitiveness◆Enhance quality management24

1. Summary-② Changes in business environment■Changes in business environment after working out
the Plan (May 2015)
Global economy• Change of monetary policy by each nation (a rate increase in the
US and a negative interest rate in Japan)• Concern over the economic slowdown in Japan due to a strong yen
and declining share prices• Lingering slowdown in the economic growth in emerging
countries as well as in China

Market trends• Sluggish sales of new cars in Japan and emerging countries• More vehicles equipped with safety devices

CMK’s trend• Business restructuring through downsizing of domestic production
sites and a voluntary retirement program25

1.Summary-③ Consolidated Income Statement■Consolidated Income Statement（Hundred Millions of Yen）

Medium-Termmanagement（May 25, 2015 release）
FY2015 FY2016 FY2017

Sales
OperatingincomeResults and Forecast（As of May 26, 2016)
FY 2015
FY 2016（Results） （Forecast）

FY2017（Plan）

750

820

900

730

770

900

15

25

45

3

25

45

Operatingmargin

2.0％

3.0％

5.0％

0.5％

3.2％

5.0％

Ordinary
income

7

16

30

▲81

16

30

1.2％

2.9％

5.0％

-15.9％

3.4％

6.1％

ROE

Assumed exchange rate:1USD=115 yen, 1EUR=125 yen

26

2. Progress of the objectives-① Summary
Objectives in the Medium-Term
Management Plan
Increase sales in the market for products forautomotive PWB and communication
devices.
Growth in the overseas market.

Progress status
Expanding sales of products for millimeterwave radar and vehicle-mounted cameras
with growing demand in the market
Continue to expand sales toforeign corporate customers
Started to enhance production capacity
in the factory of Thailand

Enhance production capacity

Strengthen cost competitivenessContinue to invest
in improving productivity
Improving profitability
through streamlining measures
Reduce procurement costs further
Enhancing support for overseas factories

Enhance quality management

Improving quality
through automated production27

2. Progress of the objectives -② Expand sales■Expanding sales in the market for products forautomotive PWB and communication devices• In the area of products for automotive use which requiring higher
quality, expand sales to the existing customers by taking advantage
of our ability to produce quality products.
• In the ADAS market which is likely to expand rapidly in the future,
expand sales by staying ahead of the competition as we are now.
• As for the expansion of sales to foreign corporate customers whichhas progressed according to the plan, continue the integrated
manufacturing and sales to achieve more sales.
• Expand sales in the communication module market for Smartphone
and Wearable equipment which is expected to grow.
• Consider other opportunities such as M&A or alliances to deliver
further sales expansion and growth.
28

2. Progress of the objectives-③
Enhance production capacity■Enhancing production capacity in the factory ofThailand• In Thailand, automotive production for exports continues to bestrong.
• Order intake by our factory in Thailand also remains strong,
operating at full capacity.
• Launch capital investment to enhance the capacity according to theMedium-Term Management Plan, as the production capacity is likely
to become insufficient.
• The capacity is expected to increase by 30% during 2016.

ＣＭＫ ＴＨＡＩＬＡＮＤ
Business Contents： Build-up PWBs,
Multilayered PWBs, Double-sided PWBs

Major use： Car electronics, Amusement
The Certification of

ISO9001/14001

29

2. Progress of the objectives-④
Enhance quality management■ Enhancing support for overseas factories• Yields in overseas factories must be improved to enhance
profitability.
• Invest in improving quality through automated production andenhance support for overseas factories from Japan.
• Improve skills and production yields by taking actions such as
horizontal deployment of various approaches being adapted inJapanese factories, dispatching Japanese staff to overseas factories,
and human exchange (trainings) between Japan and overseas
factories.

30

Supplementary material on
financial results31Supplementary material on financial results① Sales by type of PWB for FY2015（Hundred Millions of Yen）
Build-up PWBs

Multilayered PWBs

FY2015(Results)

204

294

136

94

730

FY2014(Results)

220

270

153

93

737

700

800

0

100

200

300

400

Double-sided PWBs

500

600

Others32

Supplementary material on financial results② Sales by type of PWB for FY2016（Hundred Millions of Yen）
Build-up PWBs

FY2016(Forecast)215

FY2015(Results)

204

0

100

Multilayered PWBs

Double-sided PWBs

346

136

294

200

300

136

400

Others

500

600

72

94

700

770

730

800
33

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

END

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