May 29, 2020

FY2020 ended March 31,2020

Financial Results Briefing（Note）
Due to the spread of covid-19, the financial results briefing for the year ending March 31,
2020 was canceled. So we have disclosed the only the materials.

NIHONPARKERIZINGCO.,LTD.

Table of contents
 Overview of FY2020 ended March 31,2020
 Business segment and sales composition ratios
 Consolidated financial highlights
 Consolidated quarterly trend Consolidated income statement
 Financial results of business segments by area Variation analysis of operating income
 Summary of non-operating income
 Capital investment
 R&D
 Consolidated balance sheet
 Consolidated cash flow
 Forecast of FY2021 ended March 31, 2021
 Dividend policy and shareholder return Progress of third mid-term management plan Measures against COVID-19
 Enhancing the profitability of existing businesses
 Developing of new products and new markets
 Supplementary information
 Consolidated financial highlights
 Subsidiaries and affiliated companies
NIHONPARKERIZINGCO.,LTD.

2

Business segment and sales composition ratios

Chemicals

Equipment

Jobbing

Other Surface treatment chemicals for adding corrosion
resistance, creating a paint base, providing
lubrication, cleaning substrates, design features andother various purpose.
 Rust proof oil and packaging material
 Rolling oil and lubricants Electroless plating solution（KANIGEN PLATING）
 Other products
 Plant for automotive industries
 Pretreatment, E-coat equipment for generalindustries
 Powder Coating Equipment（PARKER IONICS）
 Wet booths and Dry booths
 Rust proof coating
 Salt-Bath Nitriding（ISONITE）
 Gas carburizing, carbontriding, low temperature
carbonitriding
 Gas nitrocarburizing Electroless plating process（KANIGEN PLATING）
 Other various surface treatment

2020/3
Other
4%

Jobbing38%

Sales
consolidated
119,028
million yen

Chemical
38%

Equipment20% Building maintenance Transport of chemical products
 Manufacture and sale of metal test pieces
 Manufacture and sale of bolts

NIHONPARKERIZINGCO.,LTD.

3

Consolidated financial highlights（Unit: million yen）
140,000

129,207

120,000
102,514

109,063

109,569

119,028

114,840

100,000

80,00060,00040,00020,000017,453

17,921

18,77920,75020,13014,85015,766

16,934

17,984

17,023

2015/3

2016/32017/3

2018/3

2019/3

Sales

Operating income

15,723
12,601
2020/3

Ordinary income

NIHONPARKERIZINGCO.,LTD.

4

Consolidated quarterly trend（Unit: million yen）
40,00036,96835,00030,00032,251

31,89630,69628,091

29,27028,76930,291

25,00020,00015,00010,000
5,000
0

5,066

4,979

5,690

3,998

4,197

5,002

１Q

２Q

３Q

4,393

5,146

4,116

3,825

3,957

3,652

3,188

2,557
1,802

４Q

１Q

２Q

３Q

４Q

2019/3

Sales

3,903

2020/3Operating income

Ordinary income

NIHONPARKERIZINGCO.,LTD.

5

Consolidated income statement（Unit: million yen）
2019/32020/3

Net Sales

129,207

Operating income

Change% Change

119,028▲10,178▲7.9％

Decreased in both domestic and overseas.

17,023

12,601▲4,421▲26.0％

Decreased due to decrease of sales.
Depreciation was increased due to capital
investment.

Ordinary income

20,13015,723▲4,406▲21.9％

Non-operating income 4,096
Non-operating expenses 974

Net income attributable toparent company shareholders

11,4249,449▲1,974▲17.3％

Extraordinary gain 589
Extraordinary loss 752

94.20 yen

78.87 yen--

Ratio of ordinary income tototal assets

9.2%

7.2%

-

-

Return on equity（ROE）

8.2%

6.7%

-

-

110.43 yen

109.05 Yen--

Net income per share

The average exchange rate
(USD)

 Overseas sales ratio 34.8%（※Including exports from japan）
 Foreign currency translation effect:
Sales approx. ▲1,095 million yen, Operating income approx. ▲44 million yen
NIHONPARKERIZINGCO.,LTD.

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Financial results of business segments by area
（Unit: million yen）
Net sales
Chemicals
Japan
OverseaInter-segment
Equipment
Japan
OverseaInter-segment
Jobbing
Japan
OverseaInter-segment
OthersAdjustments and Eliminations

Total

Operating income

2019/32020/3

Changes

2019/32020/3

Changes

48,72345,920▲2,803

8,581

7,546

▲1,03529,894
17,763
1,065

28,75816,095
1,065▲1,136▲1,667
0

4,646
3,395
539

4,344
2,648
552

▲302
▲746
13

30,97525,169▲5,806

1,125

595

▲530

15,42515,088461

10,84913,647671▲4,575▲1,440
210

444
377
303

311
▲54
338

▲132
▲432
34

46,07445,225

▲848

8,354

7,323

▲1,031

27,23218,802
39

26,71618,483
26

▲516
▲318
▲13

5,337
2,799
217

5,188
1,934
200

▲149
▲865
▲16

6,315

5,919

▲396

237

▲1,123▲1,361▲2,881▲3,206▲324▲1,277▲1,739▲462

129,207

119,028▲10,178

17,023

12,601▲4,421(Note) Sales and profit of each segment include internal sales and transfers between segments.

 Due to the economic downturn caused by the US-China trade problem,
consumption tax increase in japan and the spread of COVID-19 in the world,sales and profits decreased in all segments.
NIHONPARKERIZINGCO.,LTD.

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Variation analysis of operating income（Unit: million yen）
20,000Sales
decreased

18,00016,00017,023▲3,187

14,000Rawmaterial
cost

Foreign
Currency
Translation
effect＋164▲45

Depreciation

Labor
cost

▲562

＋405

Other

▲1,19812,00012,601

10,000+1,167百万円

8,000

SG&A expense

6,000
4,000
2,000
0
2019年3月期

2019/3

売上高の減少

原材料

為替の影響

減価償却費

価格変動

NIHONPARKERIZINGCO.,LTD.

人件費

その他経費

2020年3月期
2020/38

Summary of non-operating income（Unit: million yen）

2019/32020/3

ChangeInterest income

353

418

＋64

Dividend income

660

680

＋20

1,134

1,321

＋186

License royalty

463

426

▲37

Other income

1,145

1,248

＋102

3,759

4,096

337

Interest expense

50

38

▲11

Other expense

601

935

＋334

Total of non-operating expense

652

974

＋322

Non-operating profit, net

3,106

3,121

＋14

Equity in earnings of affiliates

Total of non-operating income

 In addition to the interest and dividend income, we recorded the profit
from equity method for affiliates in japan and china and technicallicense fee. As a result, non-operating income was 3,121 million yen.

NIHONPARKERIZINGCO.,LTD.

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Capital investment（Unit: million yen）
By area

By segment
12,00012,00010,0008,000
6,000

10,02010,539
1,667

2,541

202

7,933

82

2,182

798
365
1,019

2,228

8,668

8,536

2,007

827
123

98

2,150

8,974
1,515
239
1,418

10,0008,000

10,02010,539

7,933
5,276

6,825

6,000

4,413

2,898

0

4,407

8,536

8,974

3,559

3,874

4,977

5,100

4,000

4,000
2,000

8,668

5,168

6,486

5,750

5,436

5,802
2,000

3,663

0
2015/3
Jobbing

2016/32017/3Chemicals

2018/3Equipment

2019/32020/3

4,743

3,714

3,520

4,261

2015/3 2016/3 2017/3 2018/3 2019/3 2020/3

OthersJapan

Oversea In the jobbing segment, we implemented a capital investment for the enhancement ofheat treatment and rust prevention processing equipment.
Japan 2,429 million yen, US 1,070 million yen, China 1,925 million yen.
NIHONPARKERIZINGCO.,LTD.

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R&D（1/2）（Unit: million yen）
2,500
2,112

2,181

2,303

2,302

2,154

2,220

2,000

1,500

1,000

500

0




2015/3

2016/32017/3

2018/3

2019/32020/3More than 130 professionals work at the central research laboratories.
In addition to improvements to the corrosion prevention and tribological characteristics, we havealso been engaged in the development of technology for adding a variety of properties to surfaces
including insulation, conductivity, hydrophilicity, water repellence, heat dissipation, and thermal
insulation properties, among others.

NIHONPARKERIZINGCO.,LTD.

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R&D（2/2）
Conducting R&D to expand and develop new markets

Meeting changing needs such as environmental needs (improvement of durability,
improving performance and energy efficiency, and chrome-free, etc.）In addition to rust prevention, create demand through development of diverse
functions ( insulation, conductivity, hydrophilicity, anti-finger print, design, etc.)Developing technologies for new markets. (aircraft, electronic parts, defense force,
medical parts, etc.）
Functionheat radiation

Applications⇔ insulation

Heat sink, Engine parts, Roof panel material

electric insulation ⇔ conductive

Motor parts, Electromagnetic shielding material, Electrical component

adhesive ⇔ non-stickiness

Rubber-resin-metal composite material, Seal material, Laminate materialhydrophilic ⇔ water-repellent, oil repellent

Heat exchanger, Antifouling material

low friction ⇔ high friction

Power train, Clutch, Slide rail

hardening ⇔ softening

Sliding parts, Plastic working parts

stable rust layer ⇔ rust proof coating

Weathering steel, Repair of building materials

otherFingerprint-resistant steel sheet

Enhancing fundamental research

Developing products for next generation vehicles and the aircraft market



Nonferrous material, adhesive or joining between metal and different materials.
NIHONPARKERIZINGCO.,LTD.

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Consolidated balance sheet（Unit: million yen）
2019/32020/3

ChangeCurrent assets

111,687

111,034▲653

Fixed assets

107,130

105,739▲1,391

Tangible and Intangible assets

63,28464,966

Investments and other assets

43,846Main factor of change+1,681

Acquisition
Depreciation＋8,974▲6,516

40,773▲3,073

Securities▲3,367

218,818

216,773▲2,044Current liabilities

37,226

31,384▲5,842

Accounts payables▲4,083Fixed liabilities

14,832

14,441▲390

Total liabilities

52,05945,826▲6,232

Total net assets

166,759

170,947+4,188131,253

136,183+4,929Cash dividends paid
Current profit▲2,649＋9,449

9,203

7,051

▲2,152

26,302

27,713+1,411

218,818

216,773▲2,044

64.2%

66.1%

Total assets

Shareholders' equity
Accumulated other comprehensive profit

Non-controlling interests
Total liabilities and net assets
Shareholders‘ equity ratio

Valuation difference
on available-for-sale securities ▲2,174translation adjustment▲17※Shareholders‘ equity ratio＝（”Total net assets” – “Non-controlling interests”）／Total liabilities and net assets

 Shareholders‘ equity ratio is stable.
NIHONPARKERIZINGCO.,LTD.

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Consolidated cash flow
（Unit: million yen）
2019/32020/3+17,292+17,514+19,492+15,560

Depreciation and amortization+5,992+6,516

Others▲8,192▲4,561▲10,299▲8,732

Purchase of property, plant and equipment▲8,823▲9,171Others▲1,476438▲5,663▲6,109Cash dividends paid

▲2,966▲2,704

Others▲2,697▲3,405

Effect of exchange rate change on cash and cash equivalents

▲753

+109

Net increase (decrease) in cash and cash equivalents+576+2,781

Cash and cash equivalents at beginning of the fiscal year

53,14953,726

Cash and cash equivalents at end of the fiscal year

53,72656,507

Net cash provided by operating activities
Profit before income taxes

Net cash used in investing activities

Net cash used in financing activitiesFree cash flow (“Operating cash flow”-“Cash flow from investing activities”) is positive.
NIHONPARKERIZINGCO.,LTD.

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Forecast for FY2021 ended March 31, 2021
（Unit: million yen）

2020/3
ActualChange% Change

Net Sales

119,028---

Operating income

12,601---

Ordinary income

15,723

-

-

-

9,449

-

-

-

109.05 yen-

Net income attributable to parent
company shareholders

The average exchange rate
(USD)



2021/3
Forecast

At this time, it is difficult to estimate the impact of spread infection of COVID-19, so we can notestimate the forecast. We will promptly disclose the forecast when it becomes possible.

NIHONPARKERIZINGCO.,LTD.

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Dividend policy and shareholder return

Dividend policy Based on a target payout ratio of 25% on a consolidated basis, we will determine
the amount of dividends after giving sufficient consideration to consolidated
achievements, retained earnings required for future business development, etc.
 Although sales and profits decreased in FY2020 compared to the previous year,
we will increase the dividend to increase returns to our shareholders.
60.00

40.0%

50.00

35.0%

30.4%

30.0%
40.00
30.00
20.00
10.00
0.00

18.6%

19.8%

20.2%

21.9%

23.4%

25.0%

23.00
2.00

22.00

10.00

11.00

11.00

13.00

10.00

11.00

11.00

20.00

15.00

16.50

7.50

9.00

7.50

7.50

10.00

2015/3

2016/32017/3

2018/3

20.0%

24.00

15.0%

2020/３Year-End（Ordinary）
Interim
Payout ratio (Consolidated)

10.0%
5.0%
Undecided

2019/3Year-End（Commemorative）

0.0%

2021/３（Note）Dividend for FY2021 ending March 2021 is not decided at this time, it is not be described.

NIHONPARKERIZINGCO.,LTD.

16

Progress of third mid-term management plan
（Unit: million yen）
2019/32022/3

ActualTarget119,028

133,500▲ 14,472

Chemicals

44,85450,000▲ 5,146

Equipment

24,49726,000▲ 1,503

Jobbing

45,19951,500▲ 6,301

Others

4,477

6,000

▲ 1,523

Operating income

12,601

19,000▲ 6,399

Ordinary income

15,72322,000▲ 6,277

Sales

Sales

Operating income

Difference

Ordinary income

140,000
120,000

Sales and profits decreased in all segments in
FY2020.
Due to the expansion of COVID-19,
Prolonged recession will be expected.
FY2021 forecast is undecided.
We will continue to implement key measures.
Enhancing the profitability of existing
businesses
Developing of new products and newmarkets
Ordinary income ratio
129,207

102,514

109,063

114,840

109,569

Operating profit margin

Target133,500

119,028

30.0%
25.0%

100,000
80,000

17.0%

16.4%

18.1%

17.1%

60,00040,00020,000
0

35.0%

14.5%
17,453

14.5%
17,921

15.7%

15.5%
18,77920,750

15.6%

13.2%
20,130

16.5%
13.2%

20.0%
15.0%

14.2%
10.6%
15,723

Forecast

22,000is

14,85015,766

16,934

17,984

17,023

12,601

undecided

19,0002015/3

2016/32017/3

2018/3

2019/32020/32021/32022/3

10.0%
5.0%
0.0%

Third mid-term plan

NIHONPARKERIZINGCO.,LTD.

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Measures against COVID-19
 We are implementing following measure; Established general headquarters for planning measures against
COVID-19 to ensure the safety of employees and their families
and continue the business of our group.
 Developing IT infrastructure to promote telecommuting andonline meetings.
 Use of satellite offices, staggered working hours and flexible
working hours.
 Temporarily suspended the operation of the factory.
 Assuming a prolonged recession, strongly promote cash out
control and cost reduction.
 Looking ahead to the future after the pandemic of COVID-19, weare continuing to implement key measures of third mid-term
management plan including “Strengthening the profitability ofexisting businesses" and “Developing of new products anddevelopment of new markets".

NIHONPARKERIZINGCO.,LTD.

18

Enhancing the profitability of existing businesses Strengthen group governance Human resource development
 Rationalization and reorganization
to enhance the profitability of existing businesses Strengthening of R&D system Reconstruction of manufacturing system Organizational reform Building group common infrastructure Strengthening group collaboration further
 Change corporate culture and the way of thinking

NIHONPARKERIZINGCO.,LTD.

19

Development of new products and new markets
Healthcare and Medical field

Start selling antibacterial spray and electric scalpel

IoT and Robots

Providing new products using
new technologies such as IoT,
robots and others.

NIHONPARKERIZINGCO.,LTD.

■Consolidated financial highlights（Unit: million yen）
2015/3

2016/32017/3

2018/3

2019/32020/3

102,514

109,063

109,569

114,840

129,207

119,028

Operating income

14,85015,766

16,934

17,984

17,023

12,601

Ordinary income

17,453

17,921

18,77920,75020,13015,723

Net income attributable toparent company shareholders

9,975

10,32012,22812,721

11,424

9,449

Operating profit margin

14.5%

14.5%

15.5%

15.7%

13.2%

10.6%

Sales ordinary income ratio

17.0%

16.4%

17.1%

18.1%

15.6%

13.2%

Ratio of ordinary income
to total assets

9.9%

9.5%

9.7%

10.0%

9.2%

7.2%

Return on equity（ROE）

9.4%

8.9%

10.2%

9.7%

8.2%

6.7%

Shareholders‘ equity ratio

61.1%

61.5%

62.5%

62.9%

64.2%

66.1%

Net Sales

NIHONPARKERIZINGCO.,LTD.

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■Main sbsidiaries and affiliated companies (As of 31st March 2020)（China）■ Parker Surface Technologies (Shanghai) Co., Ltd.
■Parker Engineering (Shanghai) Co., Ltd.
■Kanigen (Shanghai) Trade Co., Ltd.
■Guangzhou Parkerizing Co., Ltd.
■Foshan Parker Surface Modification Co., Ltd.
■RIZHAO PARKER SURFACE TREATMENT CO.,LTD.
□Shenyang Parkerizing Co., Ltd.
□Shanghai Parkerizing Co., Ltd.
□Wuhan Parkerizing Chemical Co., Ltd.

（U.K.）■Delamin Nitriding Salts（Belgium）■P.I of Europe NV（India）■Nihon Parkerizing (India) PVT LTD■Parker Engineering (India) PVT LTD（Thailand）■Thai Parkerizing Co., Ltd.
■PET Trading Co., Ltd.
■Parker Engineering (Thailand) Co., Ltd.
■Kanigen (Thailand) Co., Ltd. & 1 other（Indonesia）■P.T. Nusantara Parkerizing■P.T. Parker Metal Treatment Indonesia■P.T. Parker Engineering Indonesia（Japan）■Kyodo Unso
■Nihon Parkerizing Co., Ltd.
■Ozeki Chemical Industry Co., Ltd.
■Parker Engineering Co., Ltd.
■Hokkaido Parkerizing Co., Ltd.
■Parker Kako Co., Ltd.
■Hamamatsu Netsushori Kogyo Co., Ltd. ■Kyowa Manufacturing Co., Ltd.
■Parker Giken Kogyo Ltd.
■Komatsu Parkerizing Co., Ltd.
■Paltec Test Panels Co., Ltd.
■Oita Parkerizing Co., Ltd.
■Million Chemicals Co., Ltd.
■Japan Kanigen Co., Ltd.t（Korea）■Dae Han Parkerizing Co., Ltd.

□Parker Corporation□Yuugen Co., Ltd.
□Parker Netsushori Kogyo Co., Ltd.
□Nagaizumi Parkerizing Co., Ltd.
□Green-Techno（U.S.）■Parker Trutec Inc.
■Parker Trutec MMI Inc.
■Parker Engineering America■Delamin Nitriding Salts U.S.

（Taiwan）■Chung Jih Metal
Treatment Chemicals, Inc.
（The Philippines）■Philippine Parkerizing Inc.

（Mexico）■Parker Trutec Mexicana S.A de C.V.
■Parker Eng. De Mexico S.A. de C.V.

（Vietnam）■Vietnam Parkerizing Co., Ltd.
■Vietnam Parkerizing (Hanoi) Co., Ltd.
■Parker Processing Vietnam Co., Ltd.

（Malaysia）■Nihon Parkerizing Malaysia Sdn Bhd

NIHONPARKERIZINGCO.,LTD.

■ Nihon Parkerizing and subsidiaries□ Affiliated companies

22

The forward-looking statements such as forecast of financial consolidated results
contained in this document are based on the information currently available to theCompany and certain assumptions which are regarded as legitimate. Actual results
may differ from these forecast due to various factors.
Significant factors which may affect actual results include but are not limited to;a)state of the economy b)fluctuations in exchange rates c)product competitiveness,d)regulations and e)limits of intellectual property protection.
The information in this document is not intended to solicit investment.
Please make investment decisions at your own discretion.

NIHONPARKERIZINGCO.,LTD.

23