Consolidated Business Results
for the Fiscal 2019

Bando Chemical Industries, Ltd.
May 12, 2020
Copyright © 2020 Bando Chemical Industries, Ltd. All Rights Reserved.

Contents

Ⅰ. Financial summary for FY2019
Ⅱ. Business results forecast for FY2020

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Ⅰ． Financial summary for FY2019

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FY2019 Highlights（yen mil.）
FY2018Result

FY2019Result

FY2019 Forecast

Year-on-year

Announced on

Revised onchange

Aug 9, 2019

Apr 24, 2020

94,31890,247-4,070

93,00090,000

6,503

5,252

-1,250

6,000

5,000

Operating income

6,815

2,056

-4,758

6,000

2,000

Profit before income
tax

7,166

2,095-5,071

Profit attributable toowners of parent

5,457

682

-4,7744,500

500

RevenueCore operating
incomeCopyright © 2020 Bando Chemical Industries, Ltd. All Rights Reserved.

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FY2019 Highlights◼ Revenue decreased mainly in overseas area due to economic decelerationby prolonging of U.S.-China trade friction and the spread of the novel
coronavirus.
◼ Core operating income decreased due to decrease in revenue and cost tosales ratio increase in existing business, despite increase in income by new
consolidation of Aimedic MMT Co., Ltd. (hereinafter, “Aimedic MMT”).
◼ Operating income decreased due to temporary losses such as theimpairment loss of goodwill of Aimedic MMT(-3,274 million yen)and theamendment loss of retirement benefit plan(-447 million yen).
➢In IFRS, goodwill is tested for impairment annually. An impairment loss is recognized whenrecoverable amount calculated based on future cash flows is below carrying amount of assets
including goodwill. We recalculated the future cash flows based on the redemption pricedecline of main products in Aimedic MMT over the next two years and revised new products
development progress. As a result, we recorded the impairment loss for FY2019.

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FY2019 Revenue by region（￥100 mil.）

99888877

FY2016FY2017FY2018FY2019487491520516FY2016FY2017FY2018FY2019

China

209240243

220

FY2016FY2017FY2018FY2019Japan87919389

FY2016FY2017FY2018FY2019OtherAsia(Note) Revenue by region above were after inter-segment elimination.
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FY2019 Core operating income analysis(yen mil.)

-838

-265

+606

-977

+223

6,503
5,252

FY2018 result

Sales volume

Cost to sales

Gross profit

SGA expense

SGA expensedecreaseratio decrease

decrease due

increasedecrease due（Note）

to effects of（Note）

to effects of

FOREX raes

FY2019 result

FOREX rates(Note) In existing business, not including Aimedic MMT, the cost to sales ratio increased (resulted in decreased core operatingincome) and SGA expense decreased (resulted in increased core operating income).
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FY2019 Segment performance（yen mil.）

FY2018FY2019ResultResultChange

Rate of change

94,31890,247-4,070-4.3%

Automotive Parts

41,65038,953-2,697-6.5%

Industrial Products

35,42432,765-2,659-7.5%

Advance Elastomer Products

14,627

13,685-941

-6.4%

Other

3,880

5,575

+1,694+43.7%

Adjustments-1,264-731

+532－

6,503

5,252

-1,250-19.2%

Automotive Parts

3,1822,129-1,052-33.1%

Industrial Products

2,141

2,195+53+2.5%

Advance Elastomer Products

617

333-283-45.9%

Other

530

595+64+12.2%

31-1-33－Revenue

Core operating income

Adjustments

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Automotive Parts overview
Revenue after inter-segment elimination(¥100 mil.)

416

389

400
300
200

Other(-2.1%)◼ In U.S., revenue decreased due to decrease inproduction of vehicles, despite increase inaftermarket sales.

China(-6.8%)◼ Revenue decreased due to decrease inproduction of main customer, despite increase inaftermarket sales by aggressive customer
developments.

Asia(-6.4％)◼ Sales of accessory drive power transmission
belts and systems decreased in Thailand.
◼ Sales of variable speed belts for scootersdecreased in India.

Japan(-8.2％)◼ Sales of accessory drive power transmission
belts and systems decreased.

1000FY2018

FY2019Core operating income(¥100 mil.)

312130Core
operatingincome(-33.1％)

2010■ Core operating income decreased due todecrease in revenue.

0FY2018

FY2019Copyright © 2020 Bando Chemical Industries, Ltd. All Rights Reserved.

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Industrial Products overview
Revenue after inter-segment elimination(¥100 mil.)

353

327

300

200

1000
FY2018Other(-5.4%)◼ In U.S. and Turkey, sales of industrial
transmission belts decreased due to economic
deceleration.

China(-22.6％)◼ Sales of transmission belts for agricultural
machinery decreased mainly.

Asia(-31.9％)◼ Sales of transmission belts for agricultural
machinery decreased mainly.

Japan(-3.0％)◼ Sales of industrial transmission belts decreased
due to slowdown of machinery orders.
◼ Sales of large-scale conveyor belt and light-duty
conveyor belt for logistics equipment increased.

FY2019Core operating income(¥100 mil.)

212220Core
operatingincome(+2.5％)

100FY2018◼ Dealing failures for customers occurred in theprevious year, none in this year.

FY2019Copyright © 2020 Bando Chemical Industries, Ltd. All Rights Reserved.

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Advance Elastomer Products overview
Revenue after inter-segment elimination(¥100 mil.)

150

146

136

100

50Films(-3.2％)◼ Sales of films used in industrial materials anddecorate materials decreased.

Precision
Parts(-8.2％)◼ Sales of precision belts decreased.

0FY2018

FY2019Core operating income(¥100 mil.)

6.2

3.3

6Coreoperatingincome(-45.9％)

420FY2018◼ Core operating income decreased due todecrease in revenue.

FY2019Copyright © 2020 Bando Chemical Industries, Ltd. All Rights Reserved.

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Quarterly transition of business result
Revenue（¥100 mil.）

250：Net sales（JGAAP）：Revenue（IFRS）：Operating income（JGAAP）：Core operating income（IFRS）

236
222

245
225

230

237
21200
17150

Core operatingincome（¥100 mil.）

16235

230

226

225
215

232

20
17

1625

17

Property tax
and size-based
business tax

14

Property tax
and size-based
business tax 15

141220-5-510100

98550001Q

2Q

3Q

4Q

1Q

FY2017 (JGAAP)
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2Q

3Q

FY2018(IFRS)

4Q

1Q

2Q

3Q

4Q

FY2019(IFRS)
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Transition of cash flow(￥100 mil.)

150

100

CF from operating activities
CF from investing activities
Free CF

92

90

88

68
50

49

42

220-5066

20FY2015FY2016FY2017FY2018FY2019(JGAAP)(JGAAP)(IFRS)(IFRS)(IFRS)-42-46-50-46-53-100-150-141(Notes)
1. CF from operating activities for FY2016 decreased by 2.3 billion yen due to stopping liquidation of receivables.
2. CF from operating activities for FY2018 decreased by 1.4 billion yen due to addressing the revision ofenforcement of “Act against Delay Payment of Subcontract Proceeds, etc. to Subcontractors.”
3. CF from investing activities for FY2019 included payment for acquisition of Aimedic MMT(-9.2 billion yen.）
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Consolidated Statement of Financial Position（￥100 mil.）

1,025

1,200

1,102
Cash and cash

1,000equivalents
Cash and cash

Debt

equivalents

104

175

800

214

Trade and・Goodwill caused by theacquisition of Aimedic
MMT(+8.5 billion yen)other receivables

Trade andOther liabilities

other receivables

201

Other liabilities

240

249
Inventories 128

217

600

Debt

144

Inventories 129

400＜Liabilities＞
・Debt increased due tothe acquisition of Aimedic
MMT(+11 billion yen)

EquityNon-current

0・Record lease assets asright-of use assets byapplying IFRS 16（＋2.6billion yen）

Other assets 13

Other assets 13200＜Assets＞
・Net payment with cashon hand for acquisiton of
AImedic MMT（-3 billionyen）

681

Non-current

Equityassets 614

639

assets 489＜Equity＞
・Retained earnings
decreased (-0.9 billionyen)
・Other components ofequity decreased due tofluctuation of FOREX andstock market （-3 billionyen）

FY2018

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FY201913/18

Financial indicators
ROA/ROE％
10

8.7

7.9

8.1

60.4

8.2

5.3

4.7

5.0

5.3

ROAROE

40.62

1.0

FY2015FY2016FY2017FY2018FY2019(JGAAP)(JGAAP)(IFRS)(IFRS)(IFRS)

D/E ratio

％

30.0

33.7
22.9

26.3
18.7

20.0

57.7

100

FY2015FY2016FY2017FY2018FY2019(JGAAP)(JGAAP)(IFRS)(IFRS)(IFRS)Net cash / Net Debt

44.2

41.0

63.3

71.3

50

15.3

0

10.0
0.0

66.2

20

¥100 mil.

40.0

62.9

4000

60.5

6086

Capital ratio％△ 50
FY2015FY2016FY2017FY2018FY2019(JGAAP)(JGAAP)(IFRS)(IFRS)(IFRS)

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△ 100

FY2015FY2016

FY2017FY2018FY2019(JGAAP)(JGAAP)(IFRS)(IFRS)(IFRS)

-69.8
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Ⅱ. Business results forecast for FY2020

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15/18

FY2020 Business results forecast◼ It is currently difficult to predict the forecast of business results for
FY2020 reasonably at this stage due to the spread of the novel
coronavirus.
We will announce it promptly when we can disclose reasonably
forecast.

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Transition of CAPEX, depreciation and R&D expenses（￥100 mil.）Domestic capital expenditure

Depreciation and amortization

Overseas capital expenditure

R&D expenses (Bold, italic)

60
50
4052
4645

434242FY2015
16/3

17/3

4143
43

47

44
44

44444730
20100

FY2016JGAAP

FY201718/3

FY2018FY2019

19/3

20/3

IFRS
BF-2(Notes)
1. The effect of adopting IFRS 16 was not included on the above amount and graph.
The effect was an increase of capital expenditure by 1.2 billion yen, and an increase of depreciation and amortization by 1.3billion yen, respectively, for FY2019.
2. It is currently difficult to predict the amount for FY2020 at this stage.
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Shareholders returns
Basic Policy
Our basic policy is to enhance the return of profits and aim for making stable dividend
payments targeting a consolidated payout ratio 30% over the near term, whileconsidering our earnings and financial position.
Return of profits

Annual dividend per share & Payout ratio
Annual dividend per share (yen)214.3%

Payout ratio (%)

Profit attributable to owners parentPurchase of treasury stock
Dividend paid

4,951

5,100865152（yen mil.）

5,457

4,386

25.7%

24.1%

2426

26.9%

26.9%

3032

32130

FY2015FY2016FY2017FY2018FY2019

475

1,127

1,207

1,391

1,484

FY2015FY2016FY2017FY2018682

1,484

FY2019(Notes)
1. Dividend is correction value after share consolidation at a rate of two shares of common stock into one took place Oct. 1, 2016.
2. The amount from FY 2017 was under IFRS. We decided the amount of dividend paid based on JGAAP profit before FY2018.
3. The amount of dividend per share will be ￥32 because we emphasized the continuity of stable dividend payments.
4. It is currently difficult to predict the amount for FY 2020 at this stage.
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