Annual Investors’ Meeting 2024
Nitto Denko Corporation
Hideo Takasaki
President, CEO and COO
Yosuke Miki
Board Member
Senior Executive Vice President, CTO

September 13th, 2024

© Nitto Denko Corporation. All Rights Reserved.

Contents
1

Progress on Mid-Term Management Plan - Nitto for Everyone 2025

2

Industrial Tape

3

Optronics

4

Human Life

5

New Businesses© Nitto Denko Corporation. All Rights Reserved.

2

Contents

1

Progress on Mid-Term Management Plan - Nitto for Everyone 2025

© Nitto Denko Corporation. All Rights Reserved.

3

Financial Targets – Progress to Date

4

Having revised full-year forecasts for FY2024,
expecting to achieve a record high for both revenue and operating profit
Operating profit, ROE (%)

Revenue
Operating
3,500
margin(Billion yen)

915

982

3,000

18.3%
15.2%

ROE 10.9%

2,500
2,000
1,500

139

17.0%

20.0%

20.0%

16.0%

180

15.0%

240

10.0%
8.0%
6.0%
4.0%

500

2024
2024
予想
Forecast© Nitto Denko Corporation. All Rights Reserved.

2025
目標
Target2030
目標
Target

0

14.0%
12.0%

170

1,000

2023
実績
Result

18.0%

2.0%

2023
実績
Result

2024
2024
予想
Forecast

2025
目標
Target2030
目標
Target0.0%

Current Business Portfolio (Operating Profit)

5

Profits from Industrial Tape and Optronics expanding
Optimize profits in Human Life to become a more well-balanced business portfolio
FY2023 Result

FY2024
Forecast

FY2025 Target

Human Life5%139 billion yen

180 billionyen

170 billion yen

Optronics
76%

74%

75%

* The segment compositions do not include Corporate/Elimination and segments with a loss.
* Assumes that that Corporate/Elimination and segments with a loss in FY2025 will be the same level as in FY2022.

© Nitto Denko Corporation. All Rights Reserved.

Update on Future-Financial Targets

Several FY2025 targets achieved ahead of schedule
Revised to a more stringent CO2 emissions reduction target
New Targets
Ongoing Targets
FY2025(Target)FY2030(Target)New products
ratio

41%

At least 35%

At least 35%

CO2 emissions

525

470

400

kton/year

kton/year

20%

24%

30%

© Nitto Denko Corporation. All Rights Reserved.

The indicator measuring the expansion of essential
Nitto products

PF/HF category sales ratio

The indicator measuring the expansion ofPlanetFlags/HumanFlags products

Waste plastic recycling ratio

The indicator measuring the progress toward circular
economy initiatives

Sustainable materials
procurement ratio

The indicator measuring the procurement ofmaterials considering the environment

Engagement score
HR

Revised to a more
stringent target from theprevious 550 kton
(Scope 1+2)

Environment

Female leaders
ratiokton/year

Niche Top sales ratio

Products

FY2023(Result)

The indicator measuring employees" "sense of
belonging,“ "work environment," and "physical andmental well-being"

Challenge ratio

The indicator measuring the percentage of
employees who have taken on the challenge forvalue creation

FY2025 targets achieved

FY2023(Result)

FY2025(Target)FY2030(Target)44%

50%

At least

36%

40%

At least

47％

50%

60%

* In Japan (nonconsolidated)

16%

20%

30%

81

78

85

37％

70%

85%

* Flags certified
products

50%
50%

6

GHG(CO2) Emissions Reduction Plan by Setting Science Based Targets
(SBT)

7

Received SBT certification and revised to a more stringent target for Scope 1+2
A new target set for Scope 3 emission reduction, aiming for GHG(CO2) emission reduction throughout the
supply chain
Scope 1+2 (kton)

600

Terminating
BAU
use of solvents
Reducing energy use

746

500

525

400

2,000

Use of renewableenergy (RE100)

490

300

470

200

Business PF reform

1,500

1,000

400

500

100
0

2020

Baseline

2023

2024

2025

2030

* Categories for reduction

700

1,949

FY2021-2030
Decarbonization investment: JPY 80B

800

Scope 3 (kton)

2,500

0

Target2022

Baseline(Using low-carbon raw materials)

Recycled PET
adhesive tape

COLOCOLO

1,460

eco
Cover glass
OCA
Polarizers
Display panel

Biomass adhesive
Polarizer with OCA 2030
tape
Target* 1. Purchased goods and services (weight basis), 3. Fuel- and energy-related activities not included in scope 1 or scope 2, 4. Upstream
transportation and distribution, 5. Waste generated in operations, 12. End-of-life treatment of sold products© Nitto Denko Corporation. All Rights Reserved.

Cash Allocation

8

Cash deployed to capital investments on track to plan
Stable dividends the foundation for shareholder return, with flexibility inacquisition of treasury shares
3-year plan for 2023-25(Billion yen)

CapitalOperatingCash Flow
500

Allocation
Capital Investment /Decarbonization
Investment
270+30 = 300
M&A & Funding > 150
Management Funds 30

Cash on Hand
Procured Funding© Nitto Denko Corporation. All Rights Reserved.

Shareholder
Returns3-year forecast
for 2023-25

JPY 300
Explore M&A &Investment Opportunities
Shareholder Returns- Stable dividends,
DOE: 4% or higher- Flexibility in acquisition oftreasury shares

Contents

2

Industrial Tape

© Nitto Denko Corporation. All Rights Reserved.

9

Creating New Products from Release Technology

10

Enabling Right to Repair – Tapes that peels off cleanly and without damaging products

Production Process
Optimize Production
Process
Improve productivity

MLCC

Right to Repair
Ease of Fix

Repair and Replace

Semiconductor

Smartphones (Battery Replacement)
Heated Foam Release

Electric Release

UV Release

Alcohol Release© Nitto Denko Corporation. All Rights Reserved.

Improve

Recyclability andReusability

HouseholdAppliances

Automobiles

Simple and easy
separation forrepairs!

Advanced Semiconductors - Initiatives in Back-End Process Materials(Releasing)

11

Driven by generative AI, addressing new demand for back-end process materials in the advanced
semiconductor field
Global semiconductor shipments Materials demand for advanced
Example of products used in(Trillion yen)advanced semiconductors
semiconductors
Advanced
Semiconductors
CAGR: 22%

Nitto Revenue
CAGR: 40%+(2023-2030)(2023-2030)

Generative AI
Data Centers

100

Introducing new technology toback-end processes
Higher performance requirements
have resulted in denser and moreminiaturized package structure

74

HBM

33
17

Others2010
10年

Memory2020
20年© Nitto Denko Corporation. All Rights Reserved.

Solvent-resistant, lowpollution design

For releasing during chip bonding

PKG substrate

Logic

2000
01年

Optical link

Interposer

50

Protective tape used in high bandwidth
memory wafer production process

2025
25年

2030
30年

Proposed process materials
to support next-generation
lamination technology

Easy-release, heat-resistant, lowpollution, and low-damage design

Products Contributing to Power & Mobility

12

Nitto products supporting both enhanced engine performance and comfort in EVs

Silent tires

Automotive displays

Sound absorbing
materials tapeHigh durability polarizers/
adhesives
Anti scattering film

Inverters

Process/structural
materials for power
semiconductors

For large JP/NA
car manufacturers

Insulation paper in motors
Revenue
Forecast● Insulation paper use in oil-cooled motor structure(illustrative)
ThinnerInsulating‘24 ‘25 ‘30

DurableMotor inner
structure

With thinnerinsulation paper
contributing todownsizing motors
Insulation paper

Sound absorbing materials tape in silent tires

For large EU/JP
tire manufacturers● Tape use in silent tires (illustrative)
Fuel cells

Sound absorbing
Nitto’sfoam
double-sided
tape

MotorsSubgasket materials
Pressure control parts© Nitto Denko Corporation. All Rights Reserved.

Insulation paper‘24 ‘25 ‘30

With superior durability
tapes for demanding
conditions
contributing to enhanced
interior comfort

Contents

3

Optronics© Nitto Denko Corporation. All Rights Reserved.

13

Optronics Business Portfolio Transformation

14

No.1 Market Share in the high-end market, evolved into a highly profitablebusiness portfolio
29.5%
Operating margin
18.8%
Revenue(Billion yen)

429
Polarizers for TV
Polarizers for LCD
smartphones
ITO films
Polarizers for IT
devices

Revenuebreakdown

36%
2020
Result2020実績

© Nitto Denko Corporation. All Rights Reserved.

493

64%
Information
tapes
High-endpolarizers
Circuitmaterials
2024
Forecast
2024予想• Strategic exit from the TV business• Scale-down in LCD smartphones• Growth led by process protection
films and OCA, driven byincreased adoption of OLEDs• Increase in high value-added
products, including automotive
displays, OLED Smartphones
and VR• Expansion of CIS in data centers• Increase in spec-ins of highprecision circuits

Overview of Information Tapes and the History Behind it’s Growth

15

Intimate customer relationship leading to spec-ins in growth markets and expansion of applications
Currently evaluating multiple investment options to pursue further expansion
Eco-friendly UVRevenue growth over the years
Information tapes:
coaters
Spec’d-in to OLED models■ Process protection films

Began supplying to high-end OLED
smartphones
Process protection + OCA

Protective film for optical components
Surface protection

Evolving in tandemwith displaysNewapplications

OLED
Back reinforcement■ OCA (Optical Clear Adhesive)

OLED tablets
Reduced solvent use
Process
leading to lower CO2
protection emissions+ OCA
Improvement insmoothness andproduction yields

Increase in foldables
penetration
PWO (Polarizer + OCA)

2014~

Surface protection+
Back reinforcement

Fills gaps between polarizers and touch
sensors, etc. to enhance visibility of displays
Release liner
Acrylic adhesives
Release liner© Nitto Denko Corporation. All Rights Reserved.

2012

2014

2016

2018

2020

2022

2024

2026

Initiatives in the Growing Smartphones and Foldable Market

16

Revenue of non-polarizer components have expanded with the evolution of the display market
Nitto will continue to hold high market share in growth anticipated foldable OLED market by delivering
best-in-class solutions
Optimizing product mix in line with the change in display panels

Foldable volume and COE*
penetration rate (Forecast)
100

COE Penetration Rate

20

68

28

36

40

50

50%

Cover Glass

40%

Transparent Adhesive Resin

Cover Glass

OCA + Additional Function
Cover Glass
OCA + Additional Function
Color Filter
Sealing Material
OLED

60%

30%
20%

2024

2025

2026

Front Polarizer
LCD
Rear Polarizer
Backlight

2027*Color Filter on Encapsulation (= no polarizers)© Nitto Denko Corporation. All Rights Reserved.

*Screen size held constant for comparison

5 parts : 3.5

0%

2023

No. of components used : Revenue indexed

Foldable OLED COE

4 parts : 2.5

10%0

Flexible OLED

2 parts : 1

70%

46%
36%

100%

80%

64%

60

LCDs
90%

74%

80

40

M units/year

OCA
Circular Polarizer
OLED
OLED
Process Protection Film x 2

Anti-reflection Film

Process protective
film x2

Addressing OLED Demand Outside of Smartphones

17

OLEDs adoption continues in high-end laptops and tablets – Maximize revenue through increased spec-ins
Increased OLED adoption for super-large automotive displays in luxury vehicle – Nitto to win bysupporting large sized and uniquely shaped displays

Product volume by application and OLED
penetration rate (Forecast)■ Laptops
M units/year
50

OLED
Penetration
17%
Rate
0%

2%

25

0

28%

34%

■ Tablets
20%

24%

29%

33%

OLEDs for automotive displays
44%■ Support super-broad displays■ OLEDs are needed due to:Increase in demand for super-broad
displays over 1,000 mm (One-Large)
for luxury models anticipated- Ease of design- Bendability

OLED
LCD

Investment in supporting OLEDs for uniquely-shaped super-large displays
202425年2025 26年
2026 27年
2027 28年
2028
24年

2024 25年
2025 26年
2026 27年
2027 28年
2028
24年

Change in unit prices resulting from the shift to OLEDs
from LCDs (Ex. OLED tablets)

Revenueindexed© Nitto Denko Corporation. All Rights Reserved.

LCD

OLED

1

1.6

Support unique and super-long formats

Nitto’s Solutions to the Expanding AR Market

18

Combining Nitto and TLO’s strengths in hologram lamination/mass production capability toresolve thickness/weight challenges in AR glasses■ Forecast of AR glass shipments
Source: IDTechEX

M units/year

Research

CAGR: 32％
12

15

17

＋
Lamination
Pastingtechnology
technology
Mass-production
technology

Holographic lightguiding technology

Lamination / mass-production ofholographic materials

7
1
2025

2
2027

2029

2031

2033

2035

Current challenges

Thick

Heavy

Power consumption, design andetc. has been the bottle-neckbehind broad uptake© Nitto Denko Corporation. All Rights Reserved.

Light guiding
with holograms

Thin

Light

Achieves both thin/light-weight models together
with high light-guiding accuracy

Nitto-CISFLEXTM Supporting the Expanding HDD market and the Evolution inHigher-Capacity Storage

19

4,000

Higher-capacity HDDs

Global data capacity forecast

3,500

Nitto’s technology contributing topractical application of HAMR*(Exabyte)
3,000*Heat-AssistedMagnetic
MagneticRecording
Recording* Heat-Assisted
2,500
2,000

Support high-density wiring

Data centers

1,500

Photosensitive polyimide
Micro wiring technology
Metal-base material

Generative AI

1,000

High-speed, high-capacity infrastructure
expanding with the shift toward digital society

500
0

2020

2021

2022

(Nitto’s forecast)© Nitto Denko Corporation. All Rights Reserved.

2023

2024

2025

2026

2027

2028

Electric connection
function added tometal-base material

CISFLEXTM

Growth Strategy for the Circuit Materials Business

20

Create new demand by offering value based on “circuit technology+α”
New markets

Smartphones Market

Creating new demand

Micro wiring technology
Porous formation technology

high-precision
circuits

Expand to otherapplications withinsmartphones

HDD Market

CISFLEXTMEntering high-speed communicationand semiconductor markets
Porous formation technology

Photosensitive polyimide
Micro wiring technology
Metal-base material

Flexible printed circuit (FPC)
Etching technology© Nitto Denko Corporation. All Rights Reserved.

Low dielectric
substrates

Thermal conduction technology

New technologies

Semiconductor package
substrates
Micro wiring technology
Thermal conduction
technology

Revenue Forecast and Capacity Ramp-Up of the Circuit Materials
Business
Revenue
Forecast
2,500(Billion yen)
2,000
200

1,500
150

1,000
100

500
50

0

Reassessed natural disasters and geopolitical risks
Considering for new opportunities in high-precision
circuits, revised investment plans within new plants

New plants
scheduled to open
in FY2024

Establish a two-plant setup for highprecision circuits production(Kameyama, Vietnam)

Kameyama Plant
No. 12

Vietnam Plant No. 5

Vietnam Plant No. 6

CIS* businessexpansion

CIS CIS and highprecision circuits

Supporting
New products2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

© Nitto Denko Corporation. All Rights Reserved.

21

Completed in Apr. ‘24

Completed in Sept. ‘24

Scheduled completion in Dec. ‘24*CISFLEXTMContents

4

Human Life

© Nitto Denko Corporation. All Rights Reserved.

22

Growth Potential of the Oligonucleotide (Oligo) Contract
Manufacturing Market

23

Market is expected to grow 20% a year, driven by increase in clinical cases and expansion ofcommercial drugs targeting large population diseases

Oligo CMO market size

EvaluatePharma report and Nitto Estimate(Billion yen)

CAGR(2024-30)

250
2,500

20%

Oligo drug pipeline# of drugs : Nitto Estimate

FY 2024

FY 2030 Forecast

Clinical Stage (Ph 2 and 3)

Large Population Diseases(Oncology,
Rare Diseases
hypertension,
34
cardiac diseases,
respiratory diseases) 98 46

Commercial

2030

19*

108

42

13

3

(14%)

1

© Nitto Denko Corporation. All Rights Reserved.

231

Medium18
Population Diseases

80
800

2024

81

15

*Figure only includes currently active drugs

(31%)

40

4

23

Business Plan for the Oligo Manufacturing Business24

Expand the business toward 2030 by capturing emerging demand with focus on commercial drugs
Implement new mfg. technology at U.S. plant as part of measures to optimize profit
Implement new mfg. technology
Mid/long-term revenue plan
(purification process)Desired
Molecule

Oligo Tx CMO (Commercial)

PurityOligo Tx CMO (Clinical)
Polymer beads for oligo synthesis

Billion yen

Continuous
purification

50
500

Implemented in ‘24

In-line examination© Nitto Denko Corporation. All Rights Reserved.

PuritySecondarypurification

Primary
purification

2027
2023 24年度
2024 25年度
2025 26年度
2026 27年度
23年度

Inspection of
all samples byhumansLow purities
discardedTime
To be implemented in ‘26-100

Undesired

Continuous purification
increases yield
Extract desired molecules No human
onlyexaminationnecessary
Cost reduction
target

2030
30年度
Time

20%

Growth Strategy for the Oligo Business25

In anticipation of market growth, increased production capacity of processmaterials and oligo CMO
Oligo drug substance contract
manufacturing

Process materials

Nitto Denko Avecia Inc.
Kinovate Life Sciences, Inc.

Miyagi Plant

Beads production

New plant
to begin
operation:

FY2024

San Diego Plant

San Diego

Cincinnati
Cincinnati Plant(Research ~ Early
clinical stages)

Beads processing

FY2025

Capacity ramp-up
FY2024

BostonMilford Plant(Late clinical stages ~Commercial drugs)

FY2023

Pharmaceutical companies, oligo CDMOs, research institutions© Nitto Denko Corporation. All Rights Reserved.

Miyagi Plant – Installed First Hydrogen Conversion System/Boiler
Equipment within Nitto Group26

Installed hydrogen boiler and hydrogen converter for surplus solar power
Operation to begin 2H/FY24, promoting efforts to reduce CO2 emissions to zero
Electric power

Increase green electricity supply- Double solar power
generation panels- Procure green electricity
Before: Power generation shut down on holidays

Miyagi Plant
CO2 zero-emission plant

Going Forward: Generate power to convert
into hydrogen

Steam

Hydrogen conversion device(Electricity → Hydrogen)© Nitto Denko Corporation. All Rights Reserved.

Hydrogen boiler(Hydrogen → Steam)

Boiler fuel changed from LPG tohydrogen. It will now supply “heat(steam)” that emits zero CO2

Initiatives for Bio-Solvents

27

A biomaterials-development startup (in which we have a minority stake) will
pursue the development of bio-solvents for social implementation

Industrial corn

Feedstock

Commencebusiness

Bioethanol
May 2024

Production equipment tobegin operation

Manufacturing site (Sauget, Illinois, U.S.)© Nitto Denko Corporation. All Rights Reserved.

Feedstock

Commercialized
in future

Bioacetonitrile
July 2024

Introduce pilot equipment fordevelopment
Mass-production to begin in 2026
Used as raw material in oligo contract
manufacturing

Bioacetonitrile
Synthesis sample

Growth Strategies for Personal Care Materials

28

Sustain growth with product lineup that adapt to changes in the environment
Growth strategies

Proprietary
technology

Create eco-friendly products- Biodegradable nonwoven fabrics- Thinning technology

Create new products in growthareas- Anisotropic contraction
film technology- Liquid absorbing nonwoven fabrics

Portfolio transformation- Multi-layer lamination
films- High strength/Highextensibility➢ Propose products that comply withtighter environmental regulations➢ Expand adult and femicare productlines➢ Make an entry into industrial
materials applications through intragroup collaboration© Nitto Denko Corporation. All Rights Reserved.

Key initiatives
Actively expand ESG-friendly
product offerings

Launch comfort-enhancing
products to market

Promote synergistic
development themes

Contents

5

New Businesses© Nitto Denko Corporation. All Rights Reserved.

29

History of CO2 Separation Membrane Business

30

Project began in February 2020, and following the successful recovery of 300t in Shiga pilot
plant, mass production of CO2 separation membrane planned to commence in 2025
Negative Emission Factory (NEF) concept

Kameyama Plant No. 12 (3F)
CO2Separation
membrane

External
announcement

CO2 Conversion
Direct air capture

NEFーPJ

Investors’ Meeting

Feb. 20202016

Research Commences

May 2023
Apr. 2023~

Shiga Plant
300t recovery
demonstrated

Confirmed CO2 recovery rate of 90％+

© Nitto Denko Corporation. All Rights Reserved.

Nihon Keizai Shimbun
July 22nd 2023 News article

Feb. 2024

Capital investment

Mass production to begin
Dec. 2025
First shipment expected in 2026

Target 10 billion yen inrevenue by 2030

Development of CO2 Conversion Technology

31

Began initiatives to produce formic acid from biomass derived CO2 using
proprietary CO2 conversion technology
Solutions to reduce CO2 emissions
Nitto aims to provide total solutions to reduce
CO2 emissions
CO2 emission
sources

Separation/
recoveryFixation/conversion

Example theme on CO2 conversion technology: Biomassderived CO2 → Produce formic acid
Dairy
farms
Animal feed
preserving
agent, etc.

Livestock
manureCollaborate
Power stations
Factories
Atmospheric CO2
Dairy farms

CO2 separation
membranes© Nitto Denko Corporation. All Rights Reserved.

Unique CO2 conversion
technology
Synthesize formic acidfrom CO2

Produces carbon
neutral CO2 and H2

Convert CO2→ Produce formic acid

Lower carbon footprints thanformic acid synthesized frompetroleumHEnvironmental Contribution – Recovery of Factory Solvent Waste
Realizing Cost and CO2 reduction by utilizing Separation
Membrane
Combustion
Factory
工場廃溶剤
Solvent Waste

Old Model (Combustion)

CO2

New Model (Recycle)

Water＋Alcohol-based+Impurities

RefineCondense 10%→50%
Reuse Solvents (Cost Reduction)© Nitto Denko Corporation. All Rights Reserved.

CO2
CO₂

32