CMK CORPORATION（Stock code：6958）

1H FY2017 Financial Results(presentation material)
November 17, 2017
CMK CORPORATION

1Contents

１．Consolidated financial results for
1H FY2017
２．Trends of Automotive PWB marketand Sales performance of CMK
３． Supplementary material on
financial results2１．Consolidated financial resultsfor 1H FY20173

Consolidated financial results for 1H FY2017①Key points of 1H FY 2017 Financial results• Continued momentum in the increasing orders of our key products
for automotive use• Sales increased and profitability improved simultaneously,reflecting the impact of production capacity enhancements
and productivity improvements
50,00037,14835,785

2,136
1,791

30,00020,00041,981884

2,000860

1,000

10,000000

2H FY 2015

1H FY 2016

2H FY 2016

1H FY2017

Results

Results

Results

Results

Sales

Operating income

Operating income (Millions of Yen)

Sales (Millions of Yen)

40,00039,5843,000

4Consolidated financial results for 1H FY2017②Consolidated Income statement
Profits more than doubled compared with the previous
fiscal year in all the profit related items （Millions of Yen）
1H FY 2016Results

1H FY 2017
Results

YoY
Change%35,78541,981+6,195+17.3%

860

2,136+1,276+148.4%

2.4%

5.1%

+2.7%

Ordinary income

776

1,984+1,207+155.5%

Profit attributableto owners ofparent

802

1,630+827+103.1%111.47112.12+0.65+0.6%

Net sales
Operating income
Operating margin

Exchange rate(USD/JPY)

5

Consolidated financial results for 1H FY2017③Sales by application（Hundred Millions of Yen）
AV equipment Digital still camera
Mobile communications
Amusement Others

Car electronics
298

1H FY
1HFY 20172017
Results

Results+18.1%14 114 14AV equipment Digital still camera
Mobile communications
Amusement Others

Car electronics
253

1H FY 2016
1H FY 2016ResultsResults

050100419761501311

67

3 8200250300357350400450• Steady growth in sales of products for automotive use continued,driven by the progress of automotive electrification• Among products for amusement use, sales for popular gameequipment use increased

6

Consolidated financial results for 1H FY2017④Enhancing overseas production capability
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 usebeing operated continuously at full capacity

As we are continuously at full production capacity in all factories,
further production capacity enhancement is under consideration
7

Consolidated financial results for 1H FY2017⑤Improving domestic productivity
Changes in Japan profit and loss
Net Sales

235

250

Operating income

256

100
5008.9260
1512.7
Operatingmargin4.9％

1296.3
6

Operatingmargin2.7％

Operatingmargin3.5％

3Operating income

150

18(Hundred Millions of Yen)

200

Downsizing of domestic
production sites

Sales (Hundred Millions of Yen)

Focus on improving
productivity

30001H FY 2016

2H FY 2016

1H FY 2017

ResultsResultsResults• Domestic operating margin increased by1.4% as a result of ourfocus on productivity improvements mainly in Niigata factory• Further improvement in profits expected in the second half8Consolidated financial results for 1H FY2017⑥Analysis of changes in Operating income（Hundred Millions of Yen）
Improved yields
Increased productivity Decreased sales prices
Profit increase
Cost reduction etc.
due to sales growth

3.0Streamliningbusiness operations

1.9▲10.9

18.7
21.3

8.6
1H FY 2016

1H FY 2017

Operating income

Operating income(Results)(Results)

On the momentum of continuing strong orders mainly of products forautomotive use, financial results improved driven by profit growththrough sales increase as a result of production capacity enhancements 9

Consolidated financial results for 1H FY2017⑦Forecast of Consolidated Income statement（Millions of Yen）

FY 2016
Results

FY 2017
ForecastYoY
Change%75,37080,000+4,629

+6.1%

2,652

4,000+1,347+50.8%

3.5%

5.0%

+1.5%

Ordinary income

2,628

3,700+1,071+40.7%

Profit attributableto owners ofparent

2,153

3,000+846+39.3%

109.28110.00

+0.72

+0.7%

Net sales
Operating income
Operating margin

Exchange rate(USD/JPY)

10

２．Trends of Automotive PWBmarketand Sales performance of CMK

11

Trends of Automotive PWB market and Sales performance of CMK①Trends of Automotive market
1.

Increase in the number of sales of new cars
 Strong sales of new cars continue globally The car ownership rate in China and India where maintain high economic
growth rates still remains at a low level and the markets are expected togrow further

2.

Growing popularity of environment friendly next generation
automobiles (PHV/EV etc.)
 This year, regulations for fuel efficiency and emission control ofautomobiles are tightened in many countries around the world
 Automakers have switched over to the development of next generation
automobiles which are expected to become more popular rapidly in future

3. Widespread adoption of the Advanced Driving Assistance
System (ADAS) Adaption of ADAS increased rapidly, driven by growing needs for active
safety and driving assistance Japanese government sets a target to increase the adaption rate ofEmergency Brake Assist into new cars up to 90% or more by 202012

Trends of Automotive PWB market and Sales performance of CMK②Progress of automotive electrification
More use of ECU to meet demand for environment friendly andhighly functional automobiles（ECU with an annual growth of 10% and over between 2015~2021）
HV/PHV/EV/FCV ECUBattery monitoring
Hybrid control
DC-DC converter
Motor drive
Vehicle battery charger

Driving Control and Safety ECU
Smart sensor/Actuator
ADAS/Automatic operating system
Radar sensor
Car camera
Power Window smart motor

Powertrain ECU

Body electronics ECUInformation andCommunication ECU

Idle reduction
DI engine

Power management
Head lamp

IVI system
Telematics

The number of ECU embedded in automobiles
increased dramatically, driven by widespread use ofnext generation automobiles and ADAS
※Source：prepared by CMK reference to Fuji Chimera Research [Comprehensive Study of In–Vehicle Electronic Devices &Components 2017]13

Trends of Automotive PWB market and Sales performance of CMK③Change in the number of ECU usedin automobiles

Number of ECU per an automobile3530

As of 2014
Prospect・ForecastNumber of ECU (unit)

252020.2

As of 2017
Prospect・Forecast

30.4

+34%
22.7

21.6

1510502016

2017

2018

2020

2025

The number of ECU embedded in automobiles increased ahead of the forecast in2014, reflecting the accelerated progress of automotive electrification※Source：prepared by CMK reference to Fuji Chimera Research [Present situation and future prospect of theautomotive ECU market in 2014], [Comprehensive Study of In–Vehicle Electronic Devices & Components 2017]14

Trends of Automotive PWB market and Sales performance of CMK④Scale of the automotive PWB market
Market scale forecast of rigid PWBs for automotive use
CAGR(‘21/’16)

8,000
Market scale (Hundred Millions of Yen)

6,643
720

6,000
4,826

HDI
9.4%

460

4,000

4,664

3,404

2,000

0Total
6.6%

Multilayered
6.5%
Double-sided
6.3%

1,167

860
101

2016

90

2017

2018

2019

2020

2021

Prospect Forecast Forecast Forecast Forecast Forecast

Single-sided
▲2.3%

2025
Long termForecast

Automotive PWB market is expected to grow surpassing the sales increaseof new cars, driven by the progress of automotive electrification※CAGR(Compound Average Growth Rate)※Source：prepared by CMK reference to Fuji Chimera Research [Comprehensive Study of In–Vehicle Electronic Devices &Components 2017]15Trends of Automotive PWB market and Sales performance of CMK⑤Sales growth trend of our products forautomotive use
Our sales of automotive use
Focus on automotive use in the current
Medium term management plan

600

100%

62%
400

50%

381
200
0

FY2009

68%

53%

42%

435

66%

423

447

489

486

500

531

73%

80%

581

60%

【reference】
1H40%
Results298

FY2010FY2011

Sales of automotive use

FY2012FY2013

FY2014

Sales ratio of automotive use

FY2015FY2016FY2017

Sales ratio of automotive use

Sales (Hundred Millions of Yen)

69%

71%

20%
0%PlanOur focus on products for automotive use in the current Medium-term
management plan contributed to sales increase in products for automotiveuse, achieving an annual growth of around 10% on a local currency basis 16

Trends of Automotive PWB market and Sales performance of CMK⑥Applications of PWBs and CMK’s positioning
Brake Control System, Electric
Stability Control, airbag,
Millimeter-Wave Radar, Car camera,
Tire Pressure Monitoring System etc.

Information andCommunication
Car navigation, View monitor,Intelligent Transport Systems etc.

Body Electronics

Climate Control

Headlamp,
mater panel etc.

Air conditioner, Mirror Control,
Power seat, Sunroof etc.

Single-sided

Double-sided

Multilayered

HDI

Value-added Products

Required reliability

Engine Management
System, Inverter etc.

Market growthDriving Control
and Safety

Powertrain

Our focus on potential market growth, added value to products and highly
reliable business areas contributed to increase sales of PWBs for17
Powertrain/Driving Control and Safety, and HDI PWBs every year

Trends of Automotive PWB market and Sales performance of CMK⑦Sales promotion for foreign customers• ‘Overseas sales expansion’ is set as one of our key
strategies in the current Medium-term
management plan to strengthen sales activity
targeting foreign customers【Progress status】

 Orders of products for automotive use from major foreign
customers increased steadily as originally planned
 CMKC (Dong Guan) in China achieved more than doubled ratio ofsales to foreign customers in the first half of this fiscal year
compared with the previous fiscal year
 CMK Thailand expects to increase sales to foreign customers
significantly
CMK stays ahead of the competition in automotive PWB market by
expanding sales to foreign customers as well as focusing on growing areas18

３． Supplementary material on
financial results

19Supplementary material on financial results① Sales by application（Hundred Millions of yen）

1H FY2016
Results

1H FY2017
Results

YoY
ChangeFY2017
Forecast

Car electronics

253

298+45581

Mobilecommunications

1314+129

AV equipment

34+0151111-020

814+5216776+8130357

419+61800

Digital still camera
Amusement
Others
Total

20

Supplementary material on financial results②Sales by type of PWBs
（ Hundred Millions of yen ）1H FY2016
Results

1H FY2017
Results

HDI PWBs

101

129+27235

Multilayered PWBs

152

177+25357

Double-sided PWBs

6976+6129

Others3436+276357

419+61800

Total

YoY
ChangeFY2017
Forecast

21

Supplementary material on financial results③ Financial results by region（ Hundred Millions of yen ）1H FY2016
Results

1H FY2017
Results

YoY
ChangeFY2017
Forecast

Sales

OperatingincomeSales

Operatingincome

Sales

OperatingincomeSales

OperatingincomeJapan

235

6.3

260

12.7+24+6.4493

19.9

China104

3.0

141

6.3+36+3.2277

16.8

Southeast Asia

78

1.399

2.2+21+0.8

210

6.7

Europe &North America

27

1.2

29

1.8+2+0.5

54

3.1

Total

446

12.053123.1+85+11.1

1,034

46.7

Adjustment▲88▲3.4

▲111

▲1.8

▲23+1.6

▲234

▲6.7

Consolidated

357

8.641921.3+61+12.7

800

40.022Supplementary material on financial results④ Capital investment（ Hundred Millions of yen ）1H FY2016
Results

1H FY2017
Results

YoYChange

FY2017
ForecastJapan

137-621

Overseas1033+2338

Consolidated

24

40+1660

Depreciation cost2119-14223

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.)

END24