November 27, 2015
FDK CORPORATION"Mid-Term Business Plan 1618"
We, FDK group, looked ahead to the future like utilization of the renewable energy
resource with high efficiency or the arrival of the smart community where we applied theinformation and communication technology. For that background, we developed "Mid-Termbusiness plan 2013-2015" focused on strengthening of existing business and nurturing of new
business, and we has united in concerted efforts to promote.
We made extra efforts in stabilizing the management and business base by furtherselection and concentration as its basic strategy, which is business transfer of high frequency
business and optical component, business acquisition of power supply system business. And
we showed certain accomplishment with both increasing profit-earning capabilities andstrengthening the Group’s financial base.
However, we were not able to achieve our business revenue because of various factors
such as delays of the formation of each market for system battery or lithium ion capacitor. As
a result, it is delayed further than the original plan at the present.
As for operating income ratio 7% which we assumed the final target as last year ofpresent Mid-Term Business Plan, it is predicted that achievement of the final target is difficult.
Still we are changing to management processes to gain the highest possible profit steadily.
In this environment, we announced new Mid-Term Business Plan as three years
starting from fiscal year 2016 with an aim to strengthen the group’s business position andenhance its corporate value.
Please refer to presentation document "Mid-Term Business Plan 1618" for details.

Mid-Term Business Plan 1618
November 27, 2015

FDK CORPORATION

Contents

1. Business Performance Review ofMid-Term Business Plan 2013-2015

P. 2

2. Mid-Term Business Plan 1618

P. 6

3. Strengthening Corporate Structure

P.20

4. Management Targets

P.23

1

1. Business Performance Review ofMid-Term Business Plan 2013-2015

2

SummaryIn this Mid-Term Business Plan 2013-2015, FDK Group promoted businessexpansion by- reinforcement of profitability in accordance with improvement of cost
structure in existing Battery and Electronic Device business- development of newly business by the creation of technologicalsynergies in each business

START102010-2012•Business expansion including
two battery businesses as well
as existing business•Creation of synergy businessand launching on the business• Expansion of existing battery andelectronic business by enhancement ofcost competitiveness• Expansion of Battery System businessas synergy business• Strengthen development of Lithium Ion
Capacitor which is positioned as futurebusiness3

Progress（Unit: Yen100 mill.）
FY2013(result)
Plan

Current

Sales
Operating
Income(ratio)
Sales
Operating
Income(ratio)

Sales
Increase/Decrease Operating
IncomeFY2014(result)
800950FY2015(forecast）
1,100

16

38

77

2.0%

4.0%

7.0%

766

764810

1422

1.9%

2.9%

Current
2.8% （Forecast）▲ 34▲ 186▲ 290▲2▲ 16▲ 54Target

23

It is anticipated to erode the original forecast for FY2015,
the final year of the plan.
4

ResultExisting Business• Ni-MH Battery and Lithium battery have continuously expanded its business because of success in improvement on Cost
structure and steady response to the change of market circumstance.
• Alkaline Battery has been significantly blow the plan due to intensifying competition in the domestic market and the delay ofexpansion to the market worldwide although some measures has been moved on such as renewing new label design onFUJITSU brand and introduced new production line into FDK Indonesia .
• Electronic Devices have a significant difference between plan and result because of intensifying competition in the market
especially on Ferrite, Coil and Micro Inductor products although they have executed “Selection and Concentration” of businessby strengthening Power Supply business by acquaintance, and transferring High-Frequency products and Optical components
business.

New Business:• Battery system could have entered the business in large size models and the models for ICT market, however, has deviatedfrom the plan because of the delay of expansion of overseas business and market situation change for small size products.
• Lithium Ion Capacitor was forced to restructure its business fundamentals due to the delay of market buildup.

（Unit：Yen100 mill）

Breakdown of thedifference about
Operating Income77（Plan）

BatteryBusiness▲13Difference▲54
Electronic Device
Business▲4323（Forecast）

5

2. Mid-Term Business Plan 1618

6

Group mission

FDK group contributes to development ofelectronics realizing *3E through the development
and supply of Batteries and Electronic Devices
based on customer satisfaction, and aims atbecoming the “Leader in Energy Management
Systems Across Multiple Platforms” providing
customers with high-efficiency intrinsically safeproducts.
(*3E: Environmental Conservation, Energy Saving, Economic Development)

7

Business domain

FDK group promotes to provide Batteries and Electronic Devices, andBattery System exploiting its technologies

Battery SystemBatteries

Electronic Devices

Alkaline battery
Ni-MH battery
Lithium battery

Ferrite Product, Coil Device
Power Supply Module
Industrial Power Supply System

To Industrial market and Consumer market
8

Leading products
FDK group continues to provide Batteries, Electronic Devices, and BatterySystem exploiting its technologies into Industrial and Consumer markets.

Industrial Market

Ferrite Core

Piezoelectric Products

Coil Device

DCDC Converter

Power Supply system＜Electronic Devices＞

Consumer Market

Lithium Battery
Thin type
Lithium battery

Battery unit
( Embedded type )Ni-MH Battery（Industrial use）

Ni-MH Battery（Consumer use)

Alkaline Battery

Battery unit
Power Storage System
Industrial（Compatible
Power Storage System (FPSS)
to Lead Acid battery）＜Batteries & Battery System＞
9

Business Portfolio
FDK Group intends to achieve sustainable growth as “ Leader in Energy
Management Systems Across Multiple Platforms” through strengthening
base businesses that get back to the material development and developing
products that utilize synergy of Battery and Electronic Device business.
Power Storage
SystemThin Type
Lithium Battery
Lithium Battery

SystemSynergyBusiness

Battery Unit

Battery Packfor e‐CallBatteries

Power Supply
SystemPower Module

Module（DC/D,、DC/AC）Electronic Devices

Synergies
Ni-MH Battery

Coil Devices

Alkaline Battery

Ferrite Core

Piezoelectric
Devices

DeviceTonerBasebusiness

The enhancement of base business infrastructure by keeping materials
development “Powder technologies” in mind
Zinc Alloy

ManganeseDioxide

Super-lattice HydrogenAbsorbing Alloy

PiezoelectricMaterial

Magnetic
Material

Material(Strengths)
10Environment surrounding FDK Group
Social Environment- Expanse of the reliable and safety needs in the social infrastructure- Change of the domestic electricity infrastructure by expansion of the use of the renewableenergy and revision of the Electricity Business Act.
- Change of population dynamics such as increase in world population, the declining birthrate
and aging society- Concern of the Chinese economy slowdown- Continuation of the tendency to weak yenBusiness Environment- Glowing consciousness to CSR- Increasing importance of Product-Quality and Management-Quality- Tendency to decrease price of natural resource- Sharp rising in labor costs at overseas manufacturing base
- Change market structure by business market maturity and the rise of the Chinese competitors- Legislation toward promoting energy-saving policy- Enlarging demand to in-vehicle telematics appliance11Key initiatives

START10
2010-2012

Restarted under
new reclassification

Mid-Term Business Plan
2013-2015

Mid-term Business Plan
1618

Improved profitability of existing
business and starting new business

Develop differentiated products
Expansion in growth market■Develop differentiated products• Develop new material toward next generation• Develop wide range products from materials to system products corresponding todiverse market needs■Expansion in growth market• Secure and expand sales channels for battery and electronic devices in global market• Expand new products in the market that utilize synergy of Battery and Electronic
technologies

Enhancing the presence of the company as manufacturer ofsystem management for energies
12

Framework for the plan
FDK Group enhances the corporate value as the company bringing abouta prosperous future through supplying products that make use of material
technologies.

Business Strategy■Base business Develop nextgeneration materials
 Actively promote into
growing field in theindustrial market.
 Strengthen battery
sales on the global
consumer market■Synergy Business Put synergy
products on themarket
 Promote Energy
related solution
products into themarket■M & A Strengthen
operations bymaking use ofalliances

Strengthening Corporate StructureManagement Targets
13Development of next-generation new materials
FDK Group accelerates material development toward the future in close
cooperation with off-site institutes in addition to internal experience andknow-how.
Alliance withoff-site institute

FUJITSU Group（Fujitsu Lab）
・University（Joint Research）
・Overseas
Laboratory

Utilizing CAEAnalysis

Design■ Designing Material■ Designing Synthesis
Process

Evaluation

Synthesis
Sintering

Grinding

CAE : Computer Aided Engineering

14

Active promotion into growth fields in industrial market
FDK group continues to promote valuable products that conform tothe market needs in the Industrial markets with high potential.

Industrial market
Housing
Automotive
Telematics

Power Train

Residential Fire alarm

ICTEnvironmental Energy

Back up Power supply

Smart MeterBack up Power supply

Power Supply System

Expanding Sales
Battery/
Battery pack

Electronic Device

Power Supply Module

Ni-MH Battery
Lithium Battery

Coil Device/
Piezoelectric Device

Switching Power Supply/
DCDC Converter

Enhancing competence in products

Materials (Ferrite, Piezo Electric materials, Battery materials)
15

Strengthening sales activity in the consumer market
FDK Group actively develops business globally enhancing its Brand
awareness and recognition through alliance with major accounts anddistributors.

Consumer Market

Major accounts

Distributors

Supply OEM/PB products Promote our own Brand

Alkaline Battery(Primary Battery)

Ni-MH Battery(Secondary Battery)16

Release the synergy products into the market
FDK Group releases synergy products made use of its technologies
owned at Battery and Electronic Device business respectively intothe industrial market.

Industrial market
Industrial Machinery
Automotive

ICT
Environmental Energy

System Integration＋＋Thin typeHigh density
Lithium Battery mounting technology

Sensor element with material
technology utilized

Wearable Device

Power Supplysystem

Power Storage
SystemLarge Prism CellIntelligent Power Storage System17

Market development of energy related solution products
FDK Group develops the Power Supply-related products with higher
added values by applying technology of Power Supply System.

Industrial market
Industrial machinery

Environmental
EnergyICTExpandingSolution development

Power Supply
ModuleBMS

Battery System

Measuring higher added value

Power Supply System Technology（acquired from FTN)）

Power Supply
related ProductsTechnology of Power
Supply control,
System control, andMechanism

BMS ：Battery Management System

18

Strengthening operations by making use of alliances

・ Provide solution created by alliancewith system integrator
・ Cooperation for Development
・ Cooperation for material procurement
・ Business expansions through M&A193. Strengthening Corporate Structure

20

Strengthening corporate structure（１）Challenge of further strengthening of product quality
Initiatives aimed at cost reduction
Promoting corporate social responsibility (CSR)
Organizational reforms and nurturing human resources
Expansion and maintenance of information available base

21

Strengthening corporate structure（２）Improvement of financial structure
By improvement of Return on investment (ROIC), FDK aims for restoration offinancial structure through sustained growth and improvement of the corporate value
to extend in the future.
［ Implement action plans for invested-capital improvement ］
ROIC

Operatingincome ratio

Operating
IncomeOperating
Income（interest-bearing debt ＋Equity Capital）＝

Invested capitalratio

Total asset
turnoverTotal Assets

Net Sales×Net Sales①×
TotalAssets②（Interest bearing debt＋Equitycapital）③

Realizing operating income ratio of ７％① improved operating income ratio：② Improvement of total asset turnover： Prevention of increased inventory by increasing net sales （improvinginventory turnover）and improvement of the efficiency of working
capital by decreasing necessary fund (account receivable + inventory- account payable) from accelerating the receipt of cash related to its
account receivables and so on③ Improvement of invested capital ratio：Improvement of net debt equity ratio by shrinking interest-bearing
debt and increasing equity capital※ ROIC : Return On Invested Capital ）22

4. Management Targets

23

Management Targets

FY2018 Indicator - Plan
FY2015 Indicator - Forecast
Sales (in 100 Million Yen) ： 1,000
Sales (in 100 Million Yen) :810

Operating income ratio：7％

Operating income ratio: 2.8％

ROIC: 4.7％

ROIC： 15％ or more

Net debt-to-equity ratio: 15 ％Net debt-to-equity ratio： 30％ or more

Total asset turnover:

1.4

Total asset turnover：

Net debt equity ratio:

1.4

Net debt equity ratio

： 0.1

1.624

Technology creating a better future