Consolidated Financial Results
for the Six Months Ended
September 30, 2020
DaikyoNishikawa Corporation

November, 20202014年8月

Table of Contents

1. Financial Results

Page 2

2. Financial Forecast for Fiscal 2020

Page 10

3. Medium-Term Business Plan
FY2019~FY2023

Page 14

4. Hiroshima Reorganization Project

Page 24

5. Sustainability Initiative

Page 30©DaikyoNishikawa Corporation All rights reserved.

P.1

1. Financial Results©DaikyoNishikawa Corporation All rights reserved.

P.2

Highlights

 Sales decreased year on year except for Mexico due to declined
production of major customers because of COVID-19

 Despite cost reductions and increased sales in Mexico, profits
decreased mainly due to declined production
 While taking all possible measures against COVID-19, steadily
promoting light-weight product development, work style reform suchas telework, implementation of manufacturing innovation, andpreparation for mass production for next-generation product tomajor customers©DaikyoNishikawa Corporation All rights reserved.

P.3

Consolidated Profit and Loss Statement
Sales decreased due to declined production of major customers
due to spread of COVID-19 infection
Profit also decreased due to declined production(Millions of yen)

Financial
Results Ended
Sept.30, 2019

Financial
Results Ended
Sept.30, 2020

Net Sales

94,43562,999Operating
Income5,307

Ordinary
IncomeNet Income
Attributable toOwners of Parent

Net Income
per Share

Changes(%)

Announced
on Aug.4-31,436-33.3%

60,00057-5,250-98.9%-2,1005,529

231-5,298-95.8%-1,300

4,002

-159

-4,162－-2,200

56.49yen-2.25yen-58.74yen－-31.02yen©DaikyoNishikawa Corporation All rights reserved.

P.4

Changes(Y on Y)

Reasons for Increase or Decrease inConsolidated Sales(Millions of yen)
100,000
90,00080,000-30,372

70,000-259-223-580

60,00050,00094,435・Impact of declining production
for major customers

40,00062,99930,00020,00010,0000©DaikyoNishikawa Corporation All rights reserved.

要具
売
上

その他
売
上

P.5

為替
影響

19.3

18.3
期
売
上
高製品
売
上

期
売
上
高

Operating income increase or decrease factor(Millions of yen)・Impact of declining production

6,000
5,000
4,000
3,000
2,000

5,307-7,110

1,000

57

089267-1,000

833-2,000-3,000©DaikyoNishikawa Corporation All rights reserved.

P.64664

Outline of segment business performance
Segment

Outline of business performanceJapan SALES：Decreased due to declined production of major customers

due to the impact of COVID-19
 PROFIT：Although worked on process improvement, labor cost cut andfixed cost reduction, operating loss due to declined production

China/Korea

 SALES：Decreased due to a decrease in sales to Japan at Chinesesubsidiary PROFIT：Although streamlining effect at the China subsidiary,
profit decreased due to the impact of decreased sales

ASEAN

 SALES：Decreased due to declined production of major customers

due to the impact of COVID-19
 PROFIT：Although cost reduction effect such as process improvement
at the Thai subsidiary, profit decreased due to the impact of
declined production

Americas SALES：Increased due to production gain of major customers at theMexico subsidiary PROFIT：Increased due to favorable sales at the Mexico subsidiary©DaikyoNishikawa Corporation All rights reserved.

P.7

Sales by Region
Sales increased due to increase production in Americas segment,
but decreased in other segments due to the impact of COVID-19
Net sales to outside clients

Domestic

Overseas(Millions of yen)

Financial
Results Ended
Sept. 30, 2019

Financial
Results Ended
Sept. 30, 2020

(component ratio)

75,032(79.5)

China/Korea

Changes(Y on Y)

Changes(%)

45,354(72.0)-29,677（-7.5Pts）-39.6%

3,063

2,360

-703

-23.0%

ASEAN

6,977

4,393

-2,583-37.0%

Americas

9,363

10,891

1,528

16.3%

Sub total

17,644(28.0)-1,758（7.5Pts）-9.1%(component ratio)

19,403(20.5)

Total

94,43562,999-31,436-33.3%

Japan©DaikyoNishikawa Corporation All rights reserved.

P.8

Operating Income by Region
Profit declined except in Americas segment
COVID-19 impacted production decrease at major customers(Millions of yen)Domestic

Financial
Results Ended
Sept. 30, 2019

Financial
Results Ended
Sept. 30, 2020

4,175
(79.2)-1,000(－)-5,175(－)－China/Korea

26692-173-65.3%

ASEAN

883

138-744-84.3%

Americas-54565619－

Sub total

1,095(20.8)

796(－)-298(－)-27.3%

5,270-204-5,474－Japan(component ratio)

Overseas(component ratio)

Total©DaikyoNishikawa Corporation All rights reserved.

P.9

Changes(Y on Y)

Changes(%)

2. Financial Forecast for Fiscal 2020

©DaikyoNishikawa Corporation All rights reserved.

P.10

Financial Forecast for Fiscal 2020
Financial forecast revised upward due to higher production
than the previous forecast and profit improved
due to group-wide fixed cost reduction(Millions of yen)

FY2019Forecast

FY2020
Forecast(as of Aug 4th)

(Amended)

Net Sales

Changes

Changes(%)

145,000

150,000

5,000

3.4%

Operating Income

500

3,300

2,800560%

Ordinary Income

1,500

3,600

2,100140%Profit Attributable toOwners of Parent

01,6001,600－

Net Income per Share

0.00円

22.55yen

22.55yen－©DaikyoNishikawa Corporation All rights reserved.

P.11

Capital Investment, Depreciation and R&D Expenses≪Capital Investment≫≪Depreciation≫≪R&D Expenses≫

Headquarters-related wasalmost completed, resulting ina significant decrease

A slight increase due to thestart of depreciation at thenew base

Decrease due to suspensionof work and streamliningof work※FY2020: Plan

※FY2020: Plan

35
(Billions of yen)

※FY2020: Plan

5

(Billions of yen)
14

(Billions of yen)12430
25.025

10.7

1020

18.4

16.4

15

13.1

1050

3.2

9.5
9.0

3

5.1

3.0

2.924

1.2

120

©DaikyoNishikawa Corporation All rights reserved.

3.0

2.6

86

8.8
7.2

9.1

10.8

0

P.12

DividendInterim dividends is 13 yen as planned,year-end dividends forecast remains unchanged
Dividends per share
40
35

28.25

30

1916

5.625

9.25

12FY2014

FY2015FY201616.25

1510.625

1050(Yen)

3418172825
2034301530(Plan)

17(Plan)

16171513FY2017

FY2018FY2019FY2020interim of period(Plan)end of period※On January 1, 2016, we split its common stock into four shares.
The annual dividends for FY2014 and the interim dividends for FY2015 are calculated as dividends per share, assuming that a※ stock split was conducted.

Payout Ratio
FY2014FY2015FY2016FY2017FY2018FY2019FY2020(Plan)

17.0％

17.7％

18.9％

19.3％

23.2％

43.3％

133.0％※FY2016：Excluding commemorative dividend©DaikyoNishikawa Corporation All rights reserved.

P.13

3. Medium-Term Business Plan
FY2019~FY2023©DaikyoNishikawa Corporation All rights reserved.

P.14

Changes in the business environment
The business environment has changed due to the impact of COVID-19
since the formulation of the medium-term business plan FY2019~2022

 Macro environment
・Declining demands for automobiles, market-specific fluctuations
・Obstacles due to restricted movement of people Market environment
・Acceleration of CASE
・Strengthening environmental regulations
 Competitiveness environment
・Review supply chain such as strengthening BCP©DaikyoNishikawa Corporation All rights reserved.

P.15

Background of the review the medium-termbusiness plan
The medium-term business plan had to be revised in response to thedrastic business environment changes

 The impact of spreading COVID-19 infection
 Changes in mass production start time and production volume
plan of major customers
 Increasing importance of flexible measures in line with changes inthe business environment, such as new work style reform,
strengthening BCP and CSR management
Extended the planning period by 1 year to 2023, in order tocomplete the current measures that have shifted the development
speed and make it compatible to incorporate the changes inthe business environment for further growth©DaikyoNishikawa Corporation All rights reserved.

P.16

Our management challenges
Identify management challenges in each strategy for the recovery
in a pandemic circumstances
and work style reform based on new ideas and perspectives
 Challenges for BCP
Under the global emergency circumstances, delays in initial
response will have a significant damage on business operations,
so it is inevitable to strengthen BCP furthermore Challenges of in-house structure to environmental changes
Realization of work style reform adapted to the new normal
 Ensuring the safety of employees and the communityBuild a flexible and strong management base that can respond tochanges in the environment by connecting the know-how,experience and new business management methods under theCOVID-19 emergency condition©DaikyoNishikawa Corporation All rights reserved.

P.17

Outline of Medium-Term Business Plan
Continue to implement five strategies and take measures by
incorporating changes in the environment into strategies
Medium-Term Business Strategies
1 Strategy

Customer Satisfaction-Obtain sustained orders by proposing developments in strategic products-Full response to customer needs and global diversification

2 Product Strategy-Develop core competency for added value products-Pursue IT innovation, MBD and development process innovation

3 Manufacturing Strategy-Establish quality exceed up above customer expectation-Establish Optimal production and procurement method

4 Location Strategy-Boost intra-group collaboration to secure stable earnings at each location(Addition) Strengthening cooperation within each segment for early recovery
based on BCP

Management base

5 strategy-Establish cooperate brand through strengthening CSR, environmental
measures, and local contribution-Strengthening the structure to support employees to improve their workexperience(Addition) Realizing work style reform by utilizing new ideas, perspectives,and tools©DaikyoNishikawa Corporation All rights reserved.

P.18

Additional items for Location strategy：
Strengthening of BCP
Strengthening cooperation between each business segments
Quick recovery from emergencies by strengthening cooperation
between each business segments based on BCP policy Japan：Play rolls as the “mother company” and measures toward
the optimum production base
 China/Korea：Flexible correspondence to changes in the businessenvironment and customer needs and strengthening of riskmanagement ASEAN：Responding to changes in the management environmentby strengthening cooperation between bases
 Americas：Homogeneity with the mother factory and localization©DaikyoNishikawa Corporation All rights reserved.

P.19

Additional items for Management base strategy：
New work style reform

Utilization of telework
Started as a measure to prevent the spread of infection with COVID-19,
it will be utilized as one of the new work style in post COVID-19
 Respond to the diversification of work styles by identifying solutions
under the current structure, establishing and expanding teleworkrules, and improving work environment
 Strengthening web conference system, inducting communication
tools, reviewing management method and expenses, etc.

©DaikyoNishikawa Corporation All rights reserved.

P.20

Review of Management Targets
Medium-Term Business Plan
FY2019～FY2022
Consolidated Sales

Operating Income Margin

Return on Equity (ROE)

210 Billion Yen

More than 8.0%

More than 10.0%

After review
Medium-Term Business Plan
FY2019～FY2023
Consolidated Sales

Operating Income
MarginReturn on Equity(ROE)

Current Standard

200 Billion Yen

More than 7.0%

More than 10.0%

New Standard

150 Billion Yen

More than 9.0%

More than 10.0%※The new standard in "Accounting Standard for Revenue Recognition" will be applied from the fiscal year
ending March 2022, we expect sales including parts provided by major customer to fluctuate©DaikyoNishikawa Corporation All rights reserved.

P.21

Overview of management targets after review
Operating Income

30.0%

Return on Equity (ROE)

24.5%
18.7%

17.9%

20.0%

20.4%
14.7%

14.5%

9.2%

10.0%

10.7%

9.2%

10.5%

7.9%

7.3%

More than 10.0%
6.5%

More than 7.0%

4.9%(Billionsof yen)
0.0%
2,500

(※More than 9.0%)

Net Sales
2,000

2,000
1,607
1,500

1,719

1,843

1,822

1,556

1,450

1,343
1,085

(※1,500)

1,000

500

0
2013年度

2014年度

2015年度

2016年度

2017年度

2018年度

2019年度

2020年度

2023年度(Plan)(Plan)※Management targets after applying "Accounting Standard for Revenue Recognition"©DaikyoNishikawa Corporation All rights reserved.

P.22

4. Hiroshima Reorganization Project©DaikyoNishikawa Corporation All rights reserved.

P.23

Purpose of Hiroshima Reorganization Project
Background Even after the merger in 2007, we continued to utilize the existing
factories, but there has been inefficiencies due to thedecentralization of functions and organizations.
 There was no space to refurbish existing factories and equipment
 Previous Honsha(headquarters) was a rented property, and there
were space and layout restrictions
 We need a core base for promoting CSR such as responding to
the natural environment, work style reform, and barrier-free
Hiroshima reorganization project was started with the opportunity of
public recruitment of land in Jike industrial complex to solve
management issues, development capabilities, communication,productivity, and promote the creation of workplaces that arefriendly to employees and the environment,©DaikyoNishikawa Corporation All rights reserved.

P.24

Vision of Hiroshima reorganization project
Aim to raise the level of manufacturing and be anenvironment-friendly and worthwhile
Vision Strengthen development and proposal capabilities thatexceed customers’ expectations
Establish a technical center that can perform verification and evaluation all
at once Preparation of development system that can be globallylaunched at the same time
Securing facilities for offline training and simulation

 Consistent production line at the head plantLine with minimal stagnation, transportation, and work loss Promotion of environmental measures and work style reform
Correspondence to global environment, barrier-free,working environment, etc.

©DaikyoNishikawa Corporation All rights reserved.

P.25

Overall Flow of the project
Build the headquarters / head plant, improve efficiency by consolidatingeach function, and improve the development environment by utilizing space～FY2016

FY2017FY2018FY2019FY2020～FY2023

Recognized themanagement
challenges

Decided on project

Built theheadquarters / headplant

Relocated
headquarters
improve head plant

Reorganize the entire Hiroshima area

・Examining measures for management challenges
・Start the project・Acquisition of land・Started designing the headquarters / head plant・Announcement of headquarters / head plant construction
・Headquarters / head plant construction started・Started operation at Head plant・Establish offline try center・Head plant completed
・Headquarters relocated (7 bases to 5 bases)
・Reduce losses by reorganizing logistics
・Renewal of aging equipment
・Consolidation of test centers (5 bases to 4 bases)
・Improving the function of existing plants©DaikyoNishikawa Corporation All rights reserved.

P.26

Project progress
Aim for productivity improvement, and overall
optimal manufacturing system through the reorganization
 Production equipment such as molding machines and largescale painting was installed at the head plant, andconstruction is progressing as scheduled.
 Considering the introduction of an automation process aiming
at the optimum cost

 Development of production equipment for expansion of newproducts Reduction of rent warehouses due to reorganization©DaikyoNishikawa Corporation All rights reserved.

P.27

Effect of the project
Reduction of fixed costs and losses• Reduction of rental property such as warehouses• Reduce travel time losses and improve operational efficiency byconsolidating bases

Strengthen development capabilities and improve productivity• Established an offline try center to create an efficient developmentenvironment• Improving productivity by installing integrated production lines• Improving productivity and profitability by introducing new
manufacturing technology

Response of environment and work style reform• Promotion of environmental conservation by introducing energyefficient equipment• Activating communication through functional integration• Improve employee motivation and job satisfaction©DaikyoNishikawa Corporation All rights reserved.

P.28

4. Sustainability Initiatives©DaikyoNishikawa Corporation All rights reserved.

P.29

Towards a sustainable society
Strengthen corporate management in line with ESG and SDGs
to contribute to a sustainable society through business activities Corporate responsibilities for worldwide sustainable society
are increasing, such as responding to global climate changerisks and environmental regulations, and strengthening
diversity and corporate governance Identify solutions that should be addressed as a player in theautomobile industry that handles resin products, andrestructure efforts to resolve these environmental issues
Promote social contribution through business activities bypromoting the sustainability mind within the company
and incorporating it into business activities©DaikyoNishikawa Corporation All rights reserved.

P.30

Examples of Sustainability Initiatives①：
Cellulose nanofibers(CNF)
Contribute to reducing CO2 emissions in terms of both improving
fuel efficiency and manufacturing process, saving oil resources andthe formation of a society through recycling Participated in the Ministry of the Environment NCV project from 2017

Our efforts：
Molding and evaluation of CNF and resin composite materials
Performance：
Achieved 10% weight reduction of interior parts
 Participated in the NEDO (New Energy and Industrial TechnologyDevelopment Organization) project in July 2020 with the aim of early
mounting on automobile parts to expand its adoption

Our efforts：
CNF composite material development
and molding / processing technology
development for mounting automobileparts©DaikyoNishikawa Corporation All rights reserved.

P.31

Examples of Sustainability Initiatives②：
Promotion of diversity
Improving work environment where diverse human resources
are respected for personality and evaluated fairly Women’s empowerment project
Our challenges：
Reform in awareness for women‘s career advancement andunderstand the importance of women's empowerment
Measures：①Holding seminars for female employees and managers②Considering expansion of the current system according to life events③Enhanced support for career development
Focus on efforts to promote employment diversity, such as
handicapped persons, foreigners, and/or elderly colleagues©DaikyoNishikawa Corporation All rights reserved.

P.32

Important Information
This presentation material contains certain statements describing the future plans, strategies,
and performance of DaikyoNishikawa Corporation and its consolidated subsidiaries. Thesestatements are not based on historical or present fact, but rather assumptions and estimates
based on information currently available. These future plans, strategies, and performances are
subject to known and unknown risks, uncertainties, and other factors. DaikyoNishikawa
Corporation’s actual performance, business activities, and financial position may differ materiallyfrom the assumptions and estimates provided on account of the risks, uncertainties, and otherfactors. The information contained on this presentation should not be considered as an offer, orsolicitation, to deal in any of the investments or funds.

ContactDaikyoNishikawa Corporation
Corporate Planning Department
Phone: +81-82-493-5610©DaikyoNishikawa Corporation All rights reserved.