IR Briefing on
Fiscal Year ending March 2014

July 2014
Inabata & Co., Ltd.
Copyright © INABATA＆CO., LTD 20141

Summary of the Company
About Inabata :1. A company with rich history
Founded in 1890, initially as a dye businessInabata Dye Shop (Nishijin, Kyoto)

2. A company that combines the functions of a trading
company with logistics and manufacturing etc.
A globally expanding trading business
Plastic compound plants deployed throughout Asia
Planning/proposals based on product & market know-how
and expertise
Copyright © INABATA＆CO., LTD 20142

Inabata’s Areas of Business Activity
Housing & Eco Materials

Other:

Plastics
4.7%

0.2%

IT & Electronics

FY 3/14 37.6%
41.5% Sales Results:
561.1billion JPY

6.7%

9.3%

Life Industry

Copyright © INABATA＆CO., LTD 2014

Chemicals

3Inabata’s Business Spheres
Operating in 5 business segments at about 60 locations, throughout Japan and
18 countries overseas

IK GroupJapan

25 bases of operationin 9 countries, including
Singapore and Thailand

SoutheastAsia

5 bases of operation in
4 countries, including
UK & France

25 bases of operationin 2 countries – China &South Korea

5 Areas of Business:

Northeast
Asia

IT & Electronics
ChemicalsLife Industry
Plastics
Housing & Eco Materials

EuropeThe
Americas(NB) No. of overseas countries and operation bases valid as of 31 March 2014)(NB) No. of operation bases includes bona fide IKJ affiliates

10 bases of operation in
3 countries, including
USA & Mexico

Copyright © INABATA＆CO., LTD 20144

Overseas Sales (including the exports from Japan)
Europe12.7 billion
4%

The Americas
17.4 billion.
5%

Northeast Asia

192.3 billion
57%

(JPY)

Southeast Asia
114.1 billion
34%

FY 3/14
Overseas Sales
336.6 billion(60.0% of consolidated net sales)

Southeast Asia

Northeast Asia

The Americas

EuropeCopyright © INABATA＆CO., LTD 20145

Consolidated Financial Results: Trends Over the Past 15 Years(Op. Income: billion JPY)

(Sales: billion JPY)

600.0

561.1 570.0

10.9
500.0

500.0

466.0
423.3

400.0

369.7

410.7

7.6

331.7
300.0 267.8

301.3
270.2

288.9

11.0

469.0 464.4 479.9

442.7

7.9 7.6 7.7
7.2

5.5

10.0

8.6

7.5

7.5

6.6
6.2

200.0

12.5

5.0

3.5
2.9
2.1

100.0

2.5

1.7
IK20130.0

0.0

3/00 3/01 3/02 3/03 3/04 3/05 3/06 3/07 3/08 3/09 3/10 3/11 3/12 3/13 3/14 3/15
(Forecast)
Copyright © INABATA＆CO., LTD 20146

Overseas Sales & Operating Income: Trends Over the Past 15 Years
Overseas Sales(Sales: billion JPY)

Overseas Op.Income(Op. Income: billion JPY)

300.0

284.3

200.0
170.9

159.3 152.2

150.5

6.1

211.6
186.5 186.7

185.0

4.2

3.5

3.7

296.5

7.5

5.9
5.0

3.9

110.2
100.0

74.6 67.7 72.4

2.5

2.0

84.1

1.6

48.5
IK20130.0

0.0

3/00 3/01 3/02 3/03 3/04 3/05 3/06 3/07 3/08 3/09 3/10 3/11 3/12 3/13 3/14 3/15
JPY:USD
Exchange 102.4 114.7
Rates(Forecast)
131.9

119.9

107.1

104.2

118.0

119.1

(NB) The figures do not include the exports from Japan.

114.1

91.0

92.1

81.49

77.74

79.81

100.17 100.00

Copyright © INABATA＆CO., LTD 2014

7

FY3/2014 Consolidated Results Review<New Record High Sales and Profits>
Sales：

561.1 billion JPY+16.9％ YoY

Increase in overseas’ sales, centered on Asia; plus the impact of thedepreciating yen （+67.9 billion JPY）

Op. Income：10.9 billion JPY +40.8％ YoYStrong revenue trends in IT & Electronics and Plastics,
our key divisions

Current Profit： 12.4 billion JPY+29.7％ YoY

Improvements due to increase in operating income

Net Income：8.6 billion JPY +30.7％ YoY

Up due to increased operating income & gains on sales of shares inaffiliated companies
Copyright © INABATA＆CO., LTD 20148

FY3/2014 Consolidated Results Review(billion JPY)YoY Change

Forecast for thefull fiscal year,
as announced on
November 8, 2013
(B)

Progress in %(A)/(B)FY 3/13

FY 3/14(A)

Amount

Sales

479.9

561.1

+81.2 +16.9%

550.0

102.0%

Op. Income

7.7

10.9

+3.1 +40.8%

10.5

104.2%

Current Profit

9.6

12.4

+2.8 +29.7%

11.5

108.3%Net Income

6.6

8.6

+2.0 +30.7%

8.5

102.0%

Exchange
Rate: USD/JPY

79.81 100.17 +20.36

％

97.75

(NB) From FY 3/14 there was a “Change in the Method Used to Convert Income and Expenses of Overseas Subsidiaries.”
9Consequently, the figures recorded for FY 3/13 have been retrospectively adjusted to reflect these changes in accounting policy.
Copyright©
INABATA＆CO.,LTD(The same applies hereinafter in this document.)

2014

Sales by Business Segment
IT & Electronics sees robust trends in LCD sector
Plastics show strong sales in vehicle sector/OA sector, centered on Asia
Overall sales significantly helped by depreciation of the yen

Sales

IT & Electronics
ChemicalsLife Industry
Plastics
Housing & Eco Mat.

Other
Total

(billion JPY)

FY 3/13

FY 3/14FY Total

FY Total

192.4
42.7
35.8
186.0
22.2
0.4
479.9

Housing &Eco Mat.
4.7%

YoY％ Change

210.7 +9.5%
52.3 +22.4%
37.6 +5.0%
232.8 +25.1%
26.5 +19.1%
1.0 +106.7%
561.1 +16.9%

Other
0.2%
IT &
Electronics
37.6%

Plastics
41.5%

Copyright © INABATA＆CO., LTD 2014

Chemicals
9.3%

Life
Industry
6.7%

10

Op. Income by Business Segment
IT & Electronics see robust trends in LCD sector
Chemicals remain strong overall; including overseas operations
Plastics show strong sales in vehicle sector/OA sector, centered on Asia
Op. Income(million JPY)

FY 3/13
FY Total
IT & Electronics
ChemicalsLife Industry
Plastics
Housing & Eco Mat.

Other
Total

3,248
339
1,492
2,297
159
227
7,765

FY 3/14FY Total

YoY％ Change

4,863 +49.7%
862 +154.3%
1,745 +17.0%
2,828 +23.1%
343 +115.1%
292 +28.4%
10,936 +40.8%

Housing &Eco Mat.
3.1%

Other
2.7%

IT &
Electronics
44.4%

Plastics
25.9%

Copyright © INABATA＆CO., LTD 2014

Life
Industry
16.0%

Chemicals
7.9%

11B/S Summary
・Total assets increase (15.8 billion JPY) as a result of the depreciating yen
・ Due to changes caused by unification of accounting period (Mar. 31) P/L for the period (Jan. –Mar. 2013) was directly posted to retained earnings(920 million JPY）
(billion JPY)

（Assets）
Cash & deposits
Notes receivable &Accounts receivable

Inventory
Other current assets
Tangible fixed assets
Intangible fixed assets
Investments in securities
Other fixed assets
Total assets

Current Ratio

End 3/13 End 3/14 Change

19.2
137.5
34.7
5.7
9.6
4.2
60.2
5.4
276.9

23.2
144.0
41.7
5.6
11.6
3.6
69.7
5.2
305.0

131.1% 138.4%

+4.0
+6.4
+7.0
-0.1
+1.9
-0.5
+9.5
-0.1
+28.0

（Debt/net assets）
Notes payable andaccounts payable

End 3/13 End 3/14 Change

Total liabilities andnet assets

85.7
57.3
7.3
10.7
17.0
72.0
25.8
0.7
276.9

84.0
63.1
7.9
13.4
20.6
80.4
34.5
0.8
305.0

Net Worth Equity Ratio

35.3%

37.7%

Short-term loans payable
Other current liabilities
Long-term loans payable
Other fixed liabilities
Shareholders’ equity
AOCI
Other net assets

IK2013

-1.7
+5.7
+0.6
+2.7
+3.5
+8.3
+8.7
+0.0
+28.0

IK2013Copyright © INABATA＆CO., LTD 201412

Trends in Equity Capital/Net Interest-Bearing Debt/Net Debt Equity Ratio
Equity Capital

Net Int. Bearing Debt

Net D/E Ratio (Right-hand Axis)(billion JPY)

(X)

115.0

120.0
100.0
80.0
60.0

0.82

0.79

1.00

97.8
0.80

76.9

0.62
67.8

71.3

62.8

0.50

53.3

48.8

43.9

0.46
53.3

0.60

0.40

40.0
0.20

20.0
0.0

0.00
End 3/10

End 3/11

End 3/12

End 3/13

End 3/14

IK2013(NB)
Equity Capital = Net Assets – Stock Acquisition Rights – Minority Interests;
Net D/E Ratio = (Int. Bearing Debt – Cash & Deposits) / Equity Capital
Copyright © INABATA＆CO., LTD 201413

Returning Profits to Shareholders ①
 Dividend Policy：
Dividend target of 20-30% of consolidated net income for theperiod, with the aim of ensuring a stable annual dividend of
at least 10JPY per share.

 Treasury Stock Acquisition ： ⇒to be undertaken
as appropriate
Shareholder returns & value to be increased by
improving capital efficiency

Copyright © INABATA＆CO., LTD 201414

EPS Trends(JPY)

Treasury Stock Acquisition
FY 3/12: 355 million JPY
FY 3/13: 439 million JPY

160
140
120

80

118.54111.3497.45

100

137.01104.29

72.76

60

44.98
33.22

40

27.08

20
IK20130
FY 3/07(Result)

FY 3/08(Result)

FY 3/09(Result)

FY 3/10(Result)

FY 3/11(Result)

FY 3/12(Result)

Copyright © INABATA＆CO., LTD 2014

FY 3/13(Result)

FY 3/14 FY 3/15
(Result) (Forecast)15

Returning Profits to Shareholders ②
Annual Dividend per Share and Payout Ratio
Target Payout Ratio: 20～30%(JPY)

Dividend

Payout Ratio

35

60.0%
30

30

30

50.0%
26

25
20

23.4%

25.3%
21.5%

22.1%

30.0%

21.9%

12
10

10
5

40.0%

21

30.1%
22.2%

15

23

36.9%

10

20.0%

10

16.5%

10.0%

IK20130

0.0%
FY 3/07(Result)

FY 3/08(Result)

FY 3/09(Result)

FY 3/10(Result)

FY 3/11(Result)

FY 3/12(Result)

FY 3/13(Result)

FY 3/14(Result)

FY 3/15(Forecast)(NB) FY 3/11 includes a dividend of 2 JPY in celebration of the company’s 120th anniversary.
Copyright © INABATA＆CO., LTD 201416

 Corporate Governance

One additional outside director joined the board from
June 25, 2013 to allow enhanced cross-supervision
amongst the directors.

Outside Director : Mitsunori Takahagi
Former President & Current Advisor to JX Holdings, Inc.

Copyright © INABATA＆CO., LTD 201417

“IK2013” Medium-Term Management Plan
Final Year (FY3/2014) Review

18Results Achieved in the Final Year of “IK2013” (Quantitative)

Exceeded quantitative targets from IK2013 ; record highs
sales and profits

FY 3/2014（billion JPY）

FY 3/2014
Results（A)

Full Year
Forecast

561.1
10.9
12.4
8.6
8.1%
Net D/E Ratio
0.46
Net Worth Equity Ratio 37.7%
Sales
Op.IncomeCurrent Profit
Net Income
ROE

Exchange Rate (USD)

550.0
10.5
11.5
8.5
-

100.17JPY 97.75JPY(NB) “IK2013” target was set in May 2011.

Differencewith f/cast"IK2013"
Final Year
Target (B)Achievement（A/B）%

550.0 102.0%+ 0.4
10.0 109.4%+ 0.9
10.0 124.5%+ 0.1
6.0 144.5%
7.4% achieved
0.72 achieved
29.1% achieved+ 11.1-81.49JPY

Copyright © INABATA＆CO., LTD 201419

“IK2013” Quantitative Targets and Key Initiatives(Quantitative Target) FY 3/2014
Consolidated Sales: 550billion JPY
Consolidated Op. Profits: 10 billion JPY
ROE: 7.4％Net D/E Ratio: 0.72 x or less*
Net Worth Equity Ratio: 29.1％
Assumed Rate of Exchange : 1USD = 81.49 JPY(NB) Net D/E Ratio = (Int. Bearing Debt – Cash & Deposits) / Equity Capital(Key Initiatives)
1. Further Investing management resources into growing Asia and China
2. Expanding into newly emerging markets.
3. Enhancing businesses related to environment, energy, and life science themes.
4. Accelerating global human resources development.
5. Securing returns on investments.
Copyright © INABATA＆CO., LTD 201420

“IK2013” Performance Review (Quantitative)（Profit: billion JPY)

12.5

（Sales: billion JPY)

12.4
10.9
9.6

10

8.4
7.5

7.9
5.5

7.2

8.8
8.0

9.0

7.6

7.7

8.6

6.2

5
410.7

469.0

490.0

2.5

1.7
0

6.0
561.1

479.9

464.4

Sales Result

Op. Profit Result

6.6

4.8

Sales Target

Op./Current Profit Target

5.4

4.8

¥/USD

10.0

520.0

Current Profit Result
Net Profit Target
Net Profit Result

550.0

IK201392.10JPY

81.49JPY

3/10

3/11

81.49JPY 77.74JPY 81.49JPY79.81JPY 81.49JPY100.17JPY

3/12

3/13

3/14

(NB) From FY 3/14 there was a “Change in the Method Used to Convert Income and Expenses of Overseas Subsidiaries.”
Consequently, the figures recorded for FY 3/13 have been retrospectively adjusted to reflect these changes in accounting policy.
(The same applies hereinafter in this document.)

21

“IK2013” Performance Review: Sales by Business Segment

Sales( billion JPY)

600.0
500.0
400.0
300.0

550.0
23.0 1.0

561.1
26.5 1.0

192.0

232.8

48.5
47.0

200.0
100.0

238.5

0.0 JPY/USD 81.49 JPY
FY 3/14 Target

37.6
52.3
210.7

Difference vs. Target
Other
Housing &Eco. Mat.
Plastics0+ 3.5+ 40.8Life
Industry
Chemicals− 10.9IT &Electronics− 27.8+ 5.3

100.17 JPY

FY 3/14 Results

IK2013Copyright © INABATA＆CO., LTD 201422

“IK2013” Performance Review: Operating Income by Business Segment

Operating Income(million JPY)

12,00010,0008,000

10,000200 300

2,000

2,820

4,100

6,000
4,000

10,900
290
340

1,400
800
3,200

0 JPY/USD 81.49 JPY
FY 3/14 Targets

1,740
860
4,860

Difference vs. Target
Other

0

Housing &Eco. Mat.
Plastics

+ 140

Life
Industry
Chemicals

+ 340

IT &
Electronics− 1,280+ 60+ 1,660

100.17 JPY

FY 3/14 Results

IK2013Copyright © INABATA＆CO., LTD 201423

Review of “IK2013” Key Initiatives
1. Further investing management resources into growing Asia
and China
Thoroughly enhancing the strengths of our Asian Business

Expanding our plastics compound business
Strengthening worldwide cooperation, led by
the Compound Office• Establishing production systems on an optimum scale, in the mostsuitable regions［ plastics compound ］• Reducing costs by standardizing equipment/raw materials and bulk-purchase
The key items implemented in the plastics compound business under “IK2013
 Integration of plants in China
 Streamlining of production at the Malaysian plant and transfer of disused plant and equipment
to Mexico Establishment of Mexican production site(non-Asian), focused on the car market
 Establishment of Philippine production site, focused on the OA market
 Standardization of raw materials such as pigments; implementation of bulk purchasing⇒ Strengths in the compounds business promotes expansion of our plastics trading business.
Copyright © INABATA＆CO., LTD 201424

Review of “IK2013” Key Initiatives
Initiatives for China
Total sales for FY 3/14 greatly exceed medium range targets
in both China and Northeast Asia as a whole – helped by the
weak yen, as well as a strong core business
Sales Results for FY 3/2014 (simple addition basis)

NE Asia 175 billion JPY of which , China 106.9 billion JPY（billion JPY）

200.0

175.0

150.0
100.0
50.0

130.0

123.8
91.0
54.2

101.5
55.8

106.9
77.0

67.9

NE Asia TTL
China

IK20130.0
FY 3/11(Result)

FY 3/12(Result)

FY 3/13(Result)

FY 3/14(Result)(NB) NE Asia = China, Taiwan, South Korea
Copyright © INABATA＆CO., LTD 2014

FY 3/14 (MTP
Target)25

The Business Situation in China
Despite a slowdown in the rate of expansion, China's economy still continues togrow, and industries fuelled by domestic demand remain strong; including
automobiles, consumer electronics and communication-related sectors such as smart
phones.
Steady growth in business with the focus on sales of LCD materials and plastics.
Inabata
TianjinN. China

InabataShanghai

China
E. China
S. China

InabataHong Kong
InabataGuangzhou【 Northern China 】• Increase in plastics for use inelectronic/electrical machinery sectors【 Eastern China 】• Sales remain strong for plastics aimed at
the OA sector and US/European automotive
sector• Increased sales of LCD materials such as
small/medium polarizer to local customers• Increased sales to paint manufacturers ofcuring agent for use on automobiles【 Southern China 】• Huge expansion of sales of LCD materials
such as polarizers• Start of frozen fruit and fishery productbusiness aimed at South Korea andThailand

Copyright © INABATA＆CO., LTD 201426

Sales in Southeast Asia
Sales Results for FY 3/2014（simple addition basis）
SE Asia – 154.9 billion JPY
of which, Thailand – 53.2 billion JPY (+23.8% YoY)
Indonesia – 34.5 billion JPY (+35.3% YoY)
Growth in plastics business, mainly to the automotive sector, was also
aided by weak yenSoutheast Asian Sales Results(billion JPY)

200.0

154.9
150.0

106.1

111.3

120.2

100.0
50.0

SE Asia TTL

40.7
18.3

41.0
21.6

FY 3/11 (Result)

FY 3/12 (Result)

43.0
25.5

53.2
34.5

ThailandIndonesia

0.0
FY 3/13 (Result)

FY 3/14 (Result)

IK2013Copyright © INABATA＆CO., LTD 201427

Review of “IK2013” Key Initiatives
2. Expanding into newly emerging markets

Initiatives for India
Slowdown in the Indian economy, plus the fact that India is not an area where wecan capitalize on our business model which focuses on Japanese customers, haveresulted in failure to reach medium range sales targets⇒ No change in the market potential; continue to focus in a long term perspective(billion JPY)

India-related Sales Results

8

6

6

5.1
3.4

4
2

1.9
0.5

0.7

0.9

FY3/08(Result)

FY3/09(Result)

FY3/10(Result)

2.3
IK20130
FY3/11(Result)

FY3/12(Result)

Copyright © INABATA＆CO., LTD 2014

FY3/13(Result)

FY3/14(Result)

FY3/14(MTP
Target)28

Review of “IK2013” Key Initiatives
3. Enhancing businesses related to environment, energy,
and life science themes
Battery related business （Solar Cell , Lithium-ion Battery（LIB））
Market Conditions
Solar Cell (-) Oversupply in the market and falling prices(+) Increased demand in Japan due to continuation of the total buyback scheme
LIB(-) Forecasted growth in the EV and power storage applications
not realized(+) Start of HEV boom in Japan
Overall, the forecasted medium range business growth has not been realized⇒ Continue to work on as environmental and energy related issues(billion JPY)

10

7.2

8.1

8.2

5
IK20130(NB) EV : Electric Vehicle
HEV : Hybrid Electric Vehicle

Lithium-Ion
Solar Cells

FY3/12
0.2
7

FY3/130.4
7.7

FY3/140.5
7.7

29

Copyright © INABATA＆CO., LTD 2014

Review of “IK2013” Key Initiatives
４. Accelerating global human resources development•Increase the number of expat employees from Japan to 100 within 3 years•Increase the number of staff in the overseas trading divisions
to a minimum of 600 employees within 3 years (FY 3/2014) & a target staff of
700 within 5 years
No. of Expatriate Staff: 90
Trading Division Staff: 591(as of 31/3/2014)⇒ Aim at qualitative improvements trough training（No. Staff）

Accounts Managers for the South East Asia
Region

800
600

533

600

591

570

Trading Division

400

Expat Staff
200

78

90

90

2012/3/31

2013/3/31
IK2013

2014/3/31

100

0
31/3/2014 target
30

Copyright © INABATA＆CO., LTD 2014

Review of “IK2013” Key Initiatives
５. Securing returns on investments
A 3 year investment framework set at 9 billion JPY
Investment Results for April 2011 to March 2014
Cumulative Total: 10.5 billion JPY
Highlights over the 3 years：
Plastics: 4.9 billion JPY;
(Compound Business: 2.0 billion JPY; Inflatables: 1 billion JPY etc.)
IT & Electronics 2.3 billion JPY ;(LCD: 2 billion JPY)
Life Industry: 0.8 billion JPY;
(French Pharmaceutical Business: 0.5 billion JPY etc.)
Chemicals: 0.4 billion JPY, Housing & Eco Materials: 0.1 billion JPY
 “IK2013” Investment Plan 9 billion JPY (New 3 year total)
Existing Investments： select and concentrate through continuous review
New Investments： Allocation to business sectors and geographical regions where
growth can be expected
Key Sectors： 3 sectors, namely “IT & Electronics”; “Plastics”; & “Chemicals”
Key Regions： Asia (including China & India), Central & South America
31
Copyright © INABATA＆CO., LTD 2014

「New Challenge２０１６」
Medium-Term Management Plan
June 2014

Inabata & Co., Ltd.
Copyright © INABATA＆CO., LTD 201432

“ New Challenge 2016” – Quantitative Targets
Medium-Term Management Plan Targets（FY 3/2017）
Sales: 620 billion JPY
Op.Income: 12.5 billion JPY
Current Profit : 13.5 billion JPY
Net Income: 10.0 billion JPY
ROE: 8.2％Net D/E Ratio : 0.45 x or less*
Net Worth Equity Ratio : 38.0％
Assumed Ex. Rate: 1USD=100JPY(NB) Net D/E Ratio = (Int. Bearing Debt – Cash & Deposits) / Equity Capital
Copyright © INABATA＆CO., LTD 201433

“ New Challenge 2016” – 6 Key Initiatives
1. Further expansion and build-up of overseas operation• Further expansion and build-up of core Asian operations• Increasing involvement in emerging countries outside Asia
• Expansion in trade with non-Japanese companies

2. Focus on markets with growth potential and sectors thathave yet to be developed• Focus on the automotive sector; the environment & energy sector;
and the life science sector• To steadily diversify income by expanding into new merchandise andmaking new business partners.
Copyright © INABATA＆CO., LTD 201434

“ New Challenge 2016” – 6 Key Initiatives
3. Development and expansion of global management
infrastructure• Development of risk management and business management
techniques to support global management• Promotion of global standardization in information systems andbusiness processes

4. Investment aimed at future growth• 10 billion JPY earmarked for investment over the next 3 years

5. Strengthen financial position and seek further capital andasset efficiencies

6. On-going training for staff worldwide
Copyright © INABATA＆CO., LTD 201435

“New Challenge 2016” - Quantitative Targets for the 3 Years(Profits billion JPY)

(Sales billion JPY)

15.0

12.4

13.5

12.8

12.5

12.5
10.0

8.8

9.6

10.9

11.5

11.0

10.0

7.7
8.6

7.6
6.2
5.0

464.4

0.0

JPY/USD 77.74 JPY

FY3/12

8.5

7.5

561.1

570.0

590.0

620.0

79.81 JPY

100.17 JPY

100.00 JPY

100.00 JPY

100.00 JPY

FY3/15

FY3/16

FY3/17

FY3/13
IK2013

FY3/14

Op.IncomeCurrent Profit

6.6

479.9

Sales

Net Income

New Challenge2016
Copyright © INABATA＆CO., LTD 201436

“New Challenge 2016”： Sales by Business Segment
Sales(billion JPY)

700.0
600.0

561.1 1.0
26.5

570.0 1.0
26.5

590.0 1.0
27.0

500.0

620.0 1.0
29.0

Other

260.5

Housing & Eco
Mat.
Plastics

46.0
53.0

Life Industry

400.0

232.8

242.5

253.0

300.0

37.6
52.3

38.5
51.5

41.5
52.0

210.7

210.0

215.5

230.5

FY3/14(Result)

FY3/15（Target）

FY3/16（Target）

FY3/17（Target）

200.0
100.0

Chemicals
IT & Electronics

0.0

New Challenge2016
Copyright © INABATA＆CO., LTD 201437

“New Challenge 2016”： Op. Income by Business Segment
Op. Income(million JPY)

14,00012,00010,0008,000
6,000

10,9002,000

11,50011,000300

400 200

340 290

400

2,820

3,200

3,600

1,740
860

1,800
900

1,900
900

4,000

12,500500 200
4,000
2,000
1,000

Other
Housing & Eco
Mat.
Plastics
Life Industry
Chemicals

4,860

4,400

4,500

4,800

FY3/14(Result)

FY3/15（Target）

FY3/16（Target）

FY3/17（Target）

0

IT &Electronics

New Challenge2016
Copyright © INABATA＆CO., LTD 201438

“ New Challenge 2016” – 6 Key Initiatives (Case 1)
1. Further expansion and build-up of overseas operation• Further expansion and build-up of core Asian operations
Plastic Compound Business in the Philippines
Production base established in conjunction with the "China plus one"movement of Japanese OA manufacturers Production starts June 2014
Company Name
Operations
Production Capacity
Location
Production Start Date

: IK PLASTIC COMPOUND PHILS. INC.
: Plastic dyeing/compounds: 10,800 tons/p.a.
: Philippines, Laguna Province
ＯＡ: June 2014

Philippines

Production Line
(under construction)
Copyright © INABATA＆CO., LTD 201439

“ New Challenge 2016” – 6 Key Initiatives (Case 2)
1. Further expansion and build-up of overseas operation• Further expansion and build-up of core Asian operations
Initiatives for Vietnam
Establishment of production site for the manufacture of PE bags
New company established in Vietnam as a second factory for the subsidiary Apple FilmCo., Ltd., which manufactures polyethylene (PE) bags/film in Thailand.
Operations scheduled to begin at the end of August, 2014


Increasing supply capacity in response to customer tendencies to “move away from Chinese suppliers.”
Production of high value-added products in Thailand; and labor-intensive generic products in Vietnam
Company Name
Established
Operations
Production Capacity
LocationStart Date for Op
Sales Targets: Apple Film Da Nang Co., Ltd.
: Sept. 2013
: Manufacture & sale of polyethylene bags (garbage bags & standard bags): Initially 2,400 tons/p.a.
: Vietnam, Da Nang City
: End Aug. 2014
: Major Supermarkets etc.
Apple Film Da Nang construction site in May 2014
Copyright © INABATA＆CO., LTD 201440

“ New Challenge 2016” – 6 Key Initiatives (Case 3)
1. Further expansion and build-up of overseas operation• Increasing involvement in emerging countries outside Asia
Plastic Compound Business in Mexico
Production base established to meet rapid advances being madeby Japanese car manufacturers
Construction completed in November 2013; Production to start June 2014
Company Name
Operations
Production Capacity
Location
Production Start Date

: IK PLASTIC COMPOUND Mexico, S.A. de C.V.
: Plastic dyeing/compounds: 10,200 tons/p.a.
: Central Mexico,
Guanajuato Province Silao: June 2014
MexicoExternal View
Copyright © INABATA＆CO., LTD 2014

New investment area
related to car sector
41

Annual Production Capacity of Plastics Compound (Worldwide)China(2 sites)
52,000 MT/Y

VietnamPhilippines

30,000 MT/Y

10,800 MT/Y

Thailand
38,400 MT/Y

Malaysia
24,000 MT/Y
Indonesia
37,200 MT/Y

Mexico10,200 MT/Y

202,600 MT/Y : 8 sites in 7 countries(NB) No. of sites and production capacity include facilities which have not started the operation as of March 42
Copyright © INABATA＆CO., LTD 201431, 2014.

Reference

Copyright © INABATA＆CO., LTD 201443

 Business Environment
The Global Economy
 Recovery in the U.S. economy
 Leading European economies head towards recovery
 Pace of economic expansion slows in China & India sees sluggish growth

The Japanese Economy
 Strong stock prices; improvements in employment; pick-up in consumer spending;favorable export environment due to depreciating yen Economy sees a gradual recovery thanks to improvements in corporate earnings(yen)

Long-term USD exchange rate

Source: Bank of Japan

Copyright © INABATA＆CO., LTD 201444 Trends in Share Price
Inabata’s Share Price for the past 10 years
JPY/share

海外売上高
2,875億円

Copyright © INABATA＆CO., LTD. 201445

 Trends in Share Price
Inabata’s share price performance vs. TOPIX for the past 10 years(05/2004=100)
Worldwide fall in share prices
Subprime loan crisis

Continuing strong yen
The Great East Japan Earthquake (March)

LDP wins majority
in the election

INABATA

Bankruptcy of Lehman Brothers Holdings Inc. (Sep.)

Copyright © INABATA＆CO., LTD. 2014

LDP wins majority in the election
Start of the Abe Cabinet (Dec.)

46



Sales Trends(billion JPY)

(forecast)

600.0
500.0

469.0

464.4

（5,011）479.9

FY3/11

FY3/12

FY3/13

561.1

570.0

FY3/14

FY3/15

400.0
300.0
200.0
100.0
0.0
IK2013(Ref.)
E x cha ng e
R a te:U SD /J PY

FY3/11

FY3/12

FY3/13

FY3/14

FY3/15

81.49

77.74

79.81

100.17100.00(NB) From FY 3/14 the method used to convert income and expenses of overseas subsidiaries changed from the year-end rate to the average rate for the period.
Figure for FY 3/13 have been retrospectively adjusted to reflect this change; however figures for FY 3/11 andCopyright © INABATA＆CO., LTD
FY 3/12 have not been adjusted (figures in brackets show figures prior to retrospective adjustment).

47

2014



Trends in Operating Income(million JPY)

(forecast)

12,00010,000
8,000

7,900

7,632

（8,161）
7,765

FY3/11

FY3/12

FY3/13

10,936

11,000FY3/14

FY3/15

6,000
4,000
2,000
0
IK2013(NB) From FY 3/14 the method used to convert income and expenses of overseas subsidiaries changed from the year-end rate to the average rate for the period.
Figure for FY 3/13 have been retrospectively adjusted to reflect this change; however figures for FY 3/11 andCopyright © INABATA＆CO., LTD
FY 3/12 have not been adjusted (figures in brackets show figures prior to retrospective adjustment).

48

2014



Trends in Current Profit(forecast)(million JPY)

14,00012,00010,000

8,481

8,834

FY3/11

FY3/12

12,454

12,500FY3/14

FY3/15（10,034）
9,603

8,000
6,000
4,000
2,000
0
FY3/13
IK2013(NB) From FY 3/14 the method used to convert income and expenses of overseas subsidiaries changed from the year-end rate to the average rate for the period.
Figure for FY 3/13 have been retrospectively adjusted to reflect this change; however figures for FY 3/11 andCopyright © INABATA＆CO., LTD
FY 3/12 have not been adjusted (figures in brackets show figures prior to retrospective adjustment).

49

2014



Trends in Net Income(million JPY)

10,000

8,669

9,000
8,000

6,297

（6,982）
6,630

FY3/12

FY3/13

7,232

7,000

(forecast)

7,500

6,000
5,000
4,000
3,000
2,000
1,000
0
FY3/11

FY3/14

FY3/15

IK2013(NB) FY 3/11 included a 3.1bn JPY gain from sales of shares in IK Pharmacy
FY 3/12 includes an 800 million yen decrease in tax expenses as a result of operating loss
carryforwards inherited upon the liquidation of a subsidiary.
(NB) From FY 3/14 the method used to convert income and expenses of overseas subsidiaries changed from the year-end rate to the average rate for the period.
Figure for FY 3/13 have been retrospectively adjusted to reflect this change; however figures for FY 3/11 andCopyright © INABATA＆CO., LTD
FY 3/12 have not been adjusted (figures in brackets show figures prior to retrospective adjustment).

50

2014

Principal Consolidated Subsidiaries
No. of Consolidated Subsidiaries
Japan
Overseas
Total
Consolidated Subsidiaries

9

34

43

(of which manufacturers)

（5）

（15）

（20）

5

2

7

（2）

（2）

（4）

14

36

50

（7）

（17）

（24）

Unconsolidated subsidiaries &
affiliates in which equity is held(of which manufacturers)
Total(of which manufacturers)

Copyright © INABATA＆CO., LTD 201451

Manufacturing Process of Plastic Compound

SIK Group production
base

Copyright © INABATA＆CO., LTD 201452 IR queries should be directed to:Inabata & Co., Ltd. Financial Management Office, IR Dept.
TEL 81-3-3639-6579 (Contact: Ms. Ryoko MITSUI)FAX 81-3-3639-6410
E-mail inabata-ir@inabata.com

 A Cautionary Note Regarding Future Estimates
The data and future predictions contained in this document are based on information available andjudgments applicable at the time of the document’s release. Consequently the data and future forecasts
contained herein may include elements that are subject to change, and the reader should be aware that thisdocument and its contents are no guarantee of future performance.
Re: Numerical Format
Units of ‘billion’, ‘hundred million’ and ‘million’ JPY in this document use figures that have been rounded
down. Consequently there may be some discrepancy between individual values and total values, or values
showing changes between sets of data.
Copyright © INABATA＆CO., LTD 201453