Business Results: First Half of FY2021

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Agenda１．FY2021 2Q overview
２．FY2021 full-year forecast
３．Mid-term plan forecast

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Summary

2Q
overview• Although there was an impact of reduced automobile
production and increased expenses in 2Q, Nifco achieved
OP margin of 10.4% thanks to an increase in the installedvalue per vehicle and thorough control of fixed costs

FY2021
forecast
guidance
revision• Downwardly revised FY2021 guidance in light of rising raw
material costs and other expenses.
Signs that cost increase and production adjustment willbottom out by the end of the year
• Dividend forecast remains unchanged (62 yen/share)

Mid-termplan• Maintain quantitative MTP target (FY2024/3)

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Agenda１．FY2021 2Q overview
２．FY2021 full-year forecast
３．Mid-term plan forecast

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4

1. Financial highlights

OP margin is in line with pre-Covid (2Q FY2019) levels••2Q net sales were +38% YoY and operating profit was +187% YoY.
Lower sales and profit compared to pre-Covid (2Q FY2019) due to lower automobile
production and higher raw material procurement costs in North America, but profit margin isat the same level(Oku yen)800

Net sales :OP margin:

700

20.0%

693
15.0%

10.4%

600

10.0%
500

5.0%

400

300
0.0%
200
-5.0%
100

-10.0%

2Q

08/Q1
Q2
Q3
Q4
09/Q1
Q2
Q3
Q4
10/Q1
2Q
3Q
4Q
11/1Q
2Q
3Q
4Q
12/1Q
2Q
3Q
4Q
13/1Q
2Q
3Q
4Q
14/1Q
2Q
3Q
4Q
15/1Q
2Q
3Q
4Q
16/1Q
2Q
3Q
4Q
17/1Q
2Q
3Q
4Q
18/1Q
2Q
3Q
4Q
19/1Q
2Q
3Q
4Q
20/1Q
2Q
3Q
4Q
21/1Q

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2. FY2021 2Q Consolidated Results Summary

Two-digit OP margin despite increased cost and reduced auto production•Secured double-digit operating profit margin through thorough control of fixed costs,despite increase in raw material costs and other expenses and the impact of reducedautomobile production
FY2020

FY2021

2Q

1Q2Q

YoY

Sales

50.2bn70.4bn69.3bn+38.0%

Operatingprofit

2.5bn

8.9bn

7.2bn

+187.2%OP margin

5.0%

12.6%

10.4%

+5.4%pts

Net income 1)

1.3bn

6.1bn

5.8bn

+341.1%EPS

17.94 yen

60.10 yen

57.07 yen

+218.2%FX rates

1USD = JPY110.0
1EUR = JPY124.0

1USD = JPY106.0
1EUR = JPY127.8(JPY)1) Net income is net income attributable to parent company

1USD = JPY107.8 1USD = JPY-2.2
1EUR = JPY129.8 1EUR = JPY+5.8
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63. FY2021 1H Consolidated Results Summary

Profit levels and profit margins exceed pre-Covid level•

Although sales did not reach the pre-Covid level (FY2019 1H), Nifco achieved a higher
level of profit and profit margin due to thorough management of fixed costs.
FY2019FY2020

1H

1H

1H

YoY

Sales

145.3bn

107.5bn

139.7bn+30.0%.

Operatingprofit

15.1bn

6.5bn

16.1bn+146.3%OP margin

10.4%

6.0%

11.5%

+5.5%pts

Net income

9.7bn

3.1bn

11.9bn+279.0%EPS1)

90.66 yen30.85 yen117.19 yen+279.9%

FX rates

1USD = JPY110.0
1EUR = JPY124.0

1USD = JPY108.2
1EUR = JPY119.3

1USD = JPY107.8
1EUR = JPY129.8

1USD = JPY-2.2
1EUR = JPY+5.8(JPY)

1) FY2019: Diluted net income per share

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4. FY2021 1H Consolidated Operating Profit (YoY Comparison)

OP was approximately 2.5 times YoYdue to the effect of higher sales••Sales increase due to production recovery after Covid drove operating profit increase
Fixed costs such as labor costs are increasing in line with production recovery, but are
being properly controlled within the budget.
(JPY)-2.1bn-4.2bn+15.8bn

16.1bn6.5bn
operating profit(FY2020 1H)

Sales
factors

Marginal profit
factors

Fixed cost
factors

operating profit(FY2021 1H)

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5. FY2021 Segment Information (Net Sales)

Achieved year-on-year increase in sales in almost all regions•Especially in North America and Europe, sales increased remarkably due to the reboundfrom the bottom of sales by Covid in FY2020 2Q
FY2020 (1H)

FY2021 (1H)

YoYConsolidated

107.4bn

139.7bn+30%

Plastics

96.1bn126.1bn+31%Japan

29.6bn35.2bn+19%

NorthAmerica

19.9bn30.1bn+51%

Due to Increase in automobile production(January to June)

Europe13.7bn18.7bn+36%

Due to Increase in automobile production(January to June)

Asia

32.7bn42.2bn+29%

Strong performance on Korean OEMs
was sustained throughout 1Q and 2Q

China

12.0bn13.6bn+13%

11.3bn13.5bn+19%

BedNoteAll Rights Reserved. Copyright © 2021. Nifco Inc.

96. FY2021 Segment Information (Operating Profit)

Achieved year-on-year increase in profit in all regions••In North America and Europe, OP in FY2020 2Q was the bottom due to Covid, so theprofit increase compared to FY2020 1H is remarkable
Though cost increased overseas in FY2021 2Q, Nifco Korea performed well except China.
FY2020 (1H)

FY2021 (1H)

YoY

Consolidated

6.5bn

16.1bn+146%

Plastics

7.6bn

16.2bn+112%(6.1%)(8.0%)

3.4bn(11.5%)(12.9%)

Note(11.5%)(16.3%)

5.7bn

+68%

NorthAmerica0.26bn

1.2bn

+354%

Driven by strong 1Q results

Europe-0.10bn

1.4bn-Driven by strong 1Q results

Asia

4.1bn

(12.5%)

7.9bn(18.7%)

+92%

1.1bn

2.2bn

+100%

2.4bn

+85%

Japan

China
Bed

(1.3%)(-0.7%)(9.4%)

1.3bn(11.3%)(4.0%)(7.7%)(16.5%)(17.6%)

Strong performance on Korean OEMs
was sustained throughout 1Q and 2Q

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7. Customer base (average installed value per unit and customer composition)

Average installed value has increased and customer diversification progressed••Nifco has a wide range of customers including Japanese, Korean and European OEMs,and the average installed value per unit keeps increasing in FY2021
MP margin is in the upper 40% range, but recently decreased due to material cost increase
5%
12%

Other non-JapaneseOEMs
German OEM

24%

Hyundai

11%

Other Japanese OEM

14%

Honda

9%

Nissan26%

25%

Toyota

FY2011 1H
FY2011上期

FY2021
1H
FY2021上期

Marginal profit margin

9,000

8,199
7,697
6,917
6,198
5,739

6,000
4,525
3,481 3,621
3,000

3,000

2,95303,176

3,509

FY1996

4,058
4,325

4,831

5,175 5,048 5,092
5,333

4,608

4,822

5,000

5,932

5,419

3,799

FY2002

FY2008FY2014FY2021 1H
FY20209%

Customer composition(Global)Average installed value(Domestic)(Yen/unit)

20%
18%
12%
15%

50.6%
49.8%
49.6% 49.5%
49.2% 49.1%
49.1%49.2%
48.7%
49.1%

49.5%
48.9%
48.8%

47.8%
47.9% 48.1% 48.2%
47.7%
47.8%
47.5%
47.0%
46.9%
46.9%

47.6%
46.7%

47.6%

45.5%

'08/2Q'09/2Q'10/2Q'11/2Q'12/2Q'13/2Q'14/2Q'15/2Q'16/2Q'17/2Q'18/2Q'19/2Q'20/2QAll Rights Reserved. Copyright © 2021. Nifco Inc.

'21/2Q

11

Agenda１．FY2021 2Q overview
２．FY2021 full-year forecast
３．Mid-term plan forecast

All Rights Reserved. Copyright © 2021. Nifco Inc.

12

8. FY2021 Forecast (Summary of revised guidance)

Revised forecast due to lower auto production volume and cost increase••

While automobile production volume decreased, sales forecast were maintained based onexchange rate and average installed value per unit trendsDownwardly revised OP forecast in light of rising raw material costs and logistics costs
FY2021 full-year forecastOldNew

compared to oldSales

280bn

280bn

+/- 0%

Operatingprofit32bn

29.5bn-7.8%

OP margin

11.4%

10.5%

-0.9%pts

Net income

21bn

21bn+/- 0%EPS

206.8 yen

207.3 yen

+0.2%pts

Dividend

62 yen62 yen+/- 0%(JPY)All Rights Reserved. Copyright © 2021. Nifco Inc.

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9. FY2021 Forecast (Estimate)

Uncertainty still exists, but bottlenecks are expected to bottom out in Nov. and Dec•Although the business environment remains uncertain in FY2021 2H and beyond, there
are signs of recovery in automobile production, which bottomed out in November andDecember, and temporary costs are expected to subside.
: FY2021 1H: FY2021 2H: In line with the forecast or improved
compared to the original plan

2021
Automobile Business

Apr.-Jun.

Jul.-Sep.

: Worsened from the originalplan

2022
Oct.-Dec.

Jan.-Mar.

Outlook for 2H

domestic

Recovery production of
automobiles starts
and in full swing

overseas

Recovery production ofautomobiles starts
gradually

domestic-overseas

Variable costs aregradually bottoming out
End of recognition oftemporary costs

salescost

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10. FY2021 Forecast (by segment)

Revised forecast in light of impact of lower production volume and increased cost••

Sales forecast are remained considering increase in average installed value per vehicle, FX rate trend
and increase in bed business revenue despite decrease in vehicle production volume
Operating profit was revised downward due to increased cost, including temporary one in North America.

FY2021(1H)

FY2021(Initial plan)

FY2021 (revised plan)

Sales

OP

Sales

OP

Sales

OP

139.7 bn

16.1 bn

280 bn32 bn

280 bn29.5 bnplastics

126.1 bn

16.2 bn

253 bn32.6 bn

251.5 bn

29.8 bnJapan

35.2 bn

5.7 bn77 bn

13.5 bn

76 bn

13 bn

North
America

30.1 bn

1.2 bn60 bn

3.5 bn56.5 bn

1.4 bnEurope18.7 bn

1.4 bn35 bn

2.7 bn

33 bn

2 bn

Asia

42.2 bn

7.9 bn81 bn

12.9 bn85.5 bn

13.9 bnChina

13.6 bn

2.2 bn32 bn

4.4 bn29 bn

3.9 bn13.5 bn

2.4 bn27 bn

4.4 bn28.5 bn

5 bn(JPY)

Consolidated

bed

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11. FY2021 Forecast (risk and actions)

Nifco is trying to address supply issues and cost increases thoroughly•

Thoroughly implement measures such as fixed cost management to deal withuncertainties in the business environment, including automobile production trends andraw material costs.

DemandSupplyRisk factors

Situation / Response• Prolonged adjustment of automobileproduction due to supply chainproblems• Risk mitigation through diverse
customer mix(Sales to Korean OEM is steady,bed business is steady)• Response to increased production
at the time of recovery inautomobile production• Tight supply and demand formarine logistics• Soaring raw material costs

Cost• Increase in costs due to insufficient
supply of raw materials(logistics costs,alternative materials, etc.)• Securing production capacity
for increased production• Optimal global production• Promotion of price optimization
initiatives• Thorough cost reduction andfixed cost management

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1612. Capital investment and depreciation

Operating cashflow is expected to grow steadily in the forecast•

Continued management focused on cash flow
FY2020(1H)

FY2021(1H)

ChangeRevised plan (FY2021)

CAPEX

9.4 bn4.1 bn-5.3 bn

14 bn

Depreciation

6.5 bn6.2 bn-0.3 bn

13.3 bn

R&D

1.2 bn1.3 bn+0.1 bn

3 bn

Operating CF

17.6 bn

18.9 bn+1.3 bn

38 bn

Investment CF-6.1 bn-5.4 bn+0.7 bn-13.8 bn

Free CF11.5 bn

13.5 bn+2 bn

20.2 bn

Financial CF-14.9 bn-7.3 bn+7.6 bn-11.7 bn

Cash equivalentbalance

83.8 bn

104.2 bn

+20.4 bn

106.5 bn(JPY)All Rights Reserved. Copyright © 2021. Nifco Inc.

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Agenda１．FY2021 2Q overview
２．FY2021 full-year forecast
３．Mid-term plan forecast

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18

14. Mid-term management plan

Maintain quantitative mid-term plan targets in FY2023••

Sales activities of automotive parts for FY2023 models have progressed as expected
In the bed business, strong demand for high quality mattresses in China and SoutheastAsia
Outlook for FY2022 and beyond
Normalization of
automobile production

Automobile

Continued increase in demand
for lightweight, safety-related
plastic products
Supply chain problems
caused by Covid, etc.
Strong demand in Chinaand Southeast Asia

Bed

Mid-term targets (FY2023)
(JPY)

Sales

310bn

Operatingprofit38bn

OPmargin12.3%

Net income

26.5bnIncreased demand forhigh quality mattresses
Trend of consumption fromstaying at home due to Covid,
trends for hotel demand

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14. Shareholder return

Exceeded target of 30% payout ratio target through dividends and share buybacks••

Nifco has achieved stable dividends with a commitment to a payout ratio of 30%.
In addition, by flexibly conducting share buybacks, Nifco has achieved total shareholder
returns exceeding our dividend payout ratio target.

Dividend(full year)

FY2017FY2018FY2019FY2020

FY2021e62
yen/share62
yen/share62
yen/share53
yen/share62
yen/share(Maintain the initial forecast)

Shareholder Return

Share buyback 0.53mn shares(4bn yen)
Target(payout ratio)

Trackrecord30%

1mn shares(2.8bn yen)30%

0.79mn shares 0.71mn shares 0.8mn shares(1.4bn yen)
(1.4bn yen)
(2.9bn yen)30%
: Dividend: Share buyback

49%

45%

19%

14%

8%

31%

35%

30%

30%

43%

37%
8%
29%

30%

44%
14%

30%

※Nifco conducted a 2-for-1 stock split of common stock on April 1, 2018, and “Dividend” on this page is presented on the assumption that the stock split was conducted
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at the beginning of 2017.

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Forward‐looking statements or projections included in this document, including earnings projections,are based on currently available information and certain premises that are judged to be rational at thetime of this writing. Actual results may differ greatly from the forecast figures depending on variousfactors.

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