40th

M E I K O
REPORT(April 1, 2014 to March 31, 2015)

CONTENTSInterview with the President

P01

Consolidated financial data

P04

Global network

P05

Corporate Data

P06

Introducing our new technology/
Introduction of Meiko Website

Back Cover

Securities code: 6787

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Interview with the President

Actively tackling management issues, we will
strive to strengthen our management base.
Please describe the business environmentand operating results for the fiscal year
ended March 31, 2015.
Meiko saw a sales increase reflecting the signs ofrecovery in both domestic and overseas markets,
but posted losses due to worsened earnings.

I w o u l d l i k e t o e x p re s s m y s i n c e regratitude to all shareholders and investors
for their outstanding support for ourbusiness.

employment and income environment.
In the automobile industry, which represents one of
the Meiko Group’s main business partners, themarket continued to be steady on the back ofglobally vigorous demand for vehicles. In the

In the business environment surrounding the Meikoelectronics industry, smartphone-related markets

Group, economies in BRICs countries lost

mainly in China remained strong.

momentum, while economies in the U.S., and nations

Under such circumstances, the Group concentratedof Europe and Asia continued to recover and expand,its management resources on the production ofthough moderately. Meanwhile, the Japanese

PCBs for car-mounted equipment and overseas

economy in the second half was supported by asmartphones, for which demand is strong, andpickup in consumer spending, a recovery inendeavored to increase sales through an active

companies’ earnings, and an improvement in thecultivation of new customers. However, its earnings

And I am pleased to take the opportunity

Key points in FY2014

of presenting our MEIKO REPORT for the

Overview ofoperating results

Increase in sales and decrease in earnings on a year-on-year basis
Net sales: up 11.7 billion yen, Operating income: down 3.8 billion yen

Positive factors

Strong growth in sales
Steady increase in sales of automotive PCBs and smartphone PCBs

40th fiscal term (year ended March 31,(year-on-year)2015) to explain the business conditions of
FY2014 and our future business strategy.

Worsening profit margins due to a decrease in the yield of products
and a rise in unprofitable products

Negative Factors• Increases in variable and fixed costs• Rise in irregular transportation expenses in order to meet the delivery timeline

Increase in unit labor costs

01

MEIKO REPORT

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were weighed on significantly by a decrease in thefiscal year under review; however, this was not

our business is projected to continuously grow.

yield of products and resultant rises in abandonment

enough to offset a decline in earnings. As a result,

By surely capturing these markets, the Group willloss and fixed costs, a drop in orders received fromthe Group saw sales increase, but incurred

expand business on a global-scale and raise its

some of our overseas customers, and a rise in importsubstantial losses due to weakened earnings caused

profitability, aiming to achieve sustainable growth.

costs impacted by foreign exchange movements.

by a rise in scrap ratio to be disposed, an increase in

However, competition is projected to further intensify

To cope with this, on the production front, the Group

unprofitable products and a hike in unit labor costs.

in these growth markets, which rival companies inJapan and abroad are expected to enter by using

forcefully implemented various measures for
improving production yields, optimally deployed

their upgraded technology and cost competitive

What is your management strategy
for the future?

human resources and provided them withthoroughgoing education, reviewed the production

edge.
Under such circumstances, the Group will actively

We will establish a structure under which
we can achieve sustainable growth while
overcoming intense competition.

system, as well as reduced fixed and variable
expenses by cutting costs for materials throughtackle the following management issues and achievebusiness growth, under the basic management

global procurement. On the sales front, we worked

As for the future business environment of the Group,

policy “To contribute to society by providing

hard to reduce selling, general and administrative

the use of electronics is expected to further grow incustomers with the highest value and superior

expenses and other costs by ensuring thethe automotive market, given possible pursuit ofservice.”appropriateness of products to be ordered, reviewing

automated driving, safety, reliability, and

By doing our utmost to implement these measures,

logistics costs and administrative expenses, andenvironment. Meanwhile, in the mobile device

we will establish a structure which enables us to

cutting directors’ remuneration. Such a group-wide

market, the use of smartphones, etc. is likely tocreate corporate value and achieve sustainable

effort to improve earnings began to pay off late in the

spread in emerging countries. Given these factors,

growth.

Overview of consolidated operating results for FY2014
Operating results for FY2014(in 100 million yen)

Net sales

Year-on-year change(in 100 million yen)

909.0
(28.7)(37.9)

Ordinary income

10.8

(8.6)

(95.7)

Strengthening of the
production system• Enhancement of quality control at manufacturing sites
in Japan, China and Vietnam• Cost reduction through the development of cost-cutting
technologies

Acquisition of new customers
and expansion of transactions
with existing customers• Winning of promising overseas customers that are
expanding their market share• Increase of transactions with European customers incooperation with Schweizer Electronic of Germany

Strengthening of the
management structure• Promotion of management by objective, and sweeping
review of fixed costs and selling, general and administrative
expenses• Optimization of the global sales system+116.6

Operating income

Net income

Management issues Meiko will tackle(96.0)MEIKO REPORT

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02

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Meiko’s initiatives for FY2014
Please provide your forecasts for the fullyear operating performances of FY2015.

endeavor to increase orders received from existing

consideration for profit sharing as we work to maintaincustomers. However, in some markets whose growth isstable dividends. In order to secure profits forunclear, we will conduct business while closelyshareholders in the future, we are making it a basic policy

monitoring the market trends. With regard to earnings,

to allocate internal reserves to investments to further

Looking at the management environment surrounding

we will promote improvement in product yield andstrengthen and improve our business base, and to use

the Group for the next fiscal year, in the automobile

productivity, which we have been focusing on, as thethem to further expand our business.

industry, not only car sales are expected to rise, but also

most critical issues. We will also aim to strengthen the

We regret to inform you that the distribution of year-end

sales of car-mounted equipment are likely to steadily

management structure by promoting management bydividends will be postponed, as was the case for the

expand given the growing demand for the functions

objective and sweeping review of fixed costs and selling,interim dividend, in consideration of the consolidated

concerning automated driving and safety. As forgeneral and administrative expenses.

financial results for the fiscal year.

We will establish a structure under which
we can achieve sustainable growth while
overcoming intense competition.

smartphone-related devices, the markets are forecast to
expand, mainly in China, but the Group is expected to
face downward pressure on costs due to such factors as
the emergence of small and midsize manufacturers anda decline in products’ unit prices.

Company remains difficult, we are committed to doing
our utmost in carrying out measures to reward theWe will focus on maintaining stable dividends
to shareholders and increasing sustainablecorporate value

support we receive from and meet the expectations of all
stakeholders, including shareholders, striving to increase

To cope with such a market environment, the Group,

We at Meiko regard returning profits to shareholders as

corporate value and achieve sustainable growth. We lookwhile implementing the following priority measures, will

one of our top management priorities, and take businessforward to your continued support and encouragement

actively cultivate new customers in growth markets andresults and other matters comprehensively into

in the future.

Consolidated earnings forecast for FY2015
Earnings forecast for FY2015(in 100 million yen)

Net sales

03

Although the business environment surrounding the

Please give a message
to the shareholders

955.0

Year-on-year change(in 100 million yen)

+46.0

Operatingincome20.0

Ordinary income

6.0

(4.8)

Net income

(6.0)

+89.7

Forecast by application(in 100 million yen)

Results for
FY2014

Forecast for
FY2015

Priority measures for FY2015

Forecast by product(in 100 million yen)

Results for
FY2014

Forecast for
FY2015+48.7
445
Smartphones 182
53
Storage
Digital consumer electronics 47
PCB for other applications 114
68
Non-PCB
Automobiles

460
219
67
29
109
71

76
Four-layer PCB 339
Six or more-layer PCB 140
HDI PCB
257
29
PCB for other applications
68
Non-PCBDouble-sided PCB

72
324
152
326
10
71

1

Improvement in product yield

2

Increase in orders received for automotive
HDI PCBs

3

Reduction in the fixed cost ratio and the selling,
general and administrative expenses ratio

4

Improvement in labor productivity(including investments related to automation)

5

Reduction in process variable costs throughimprovement of processes

6

Acceleration of localization

MEIKO REPORT

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Consolidated financial data
Consolidated balance sheet

Net sales

90,895End of FY2013(As of March 31, 2014)

million yen

100,000(Forecast)

50,00042,74051,547

Noncurrent assets

72,686

71,416

67,57864,914

454

293

4,653

6,208

115,426

122,963

Intangible assets0
2012/3

2013/3

2014/3

2015/3

2016/3

Investments and other assets
Total assets

Operating income / Operating margin(2,865)

million yen(in million yen)

(%)

3,000

(Forecast)

4

1,500

2

0

0

-1,500-2-3,000-4

2012/3

2013/3

2014/3

2015/3

2016/3

2013/3

2014/3

2015/3

Cost of sales

69,02383,063Gross profit

10,208

7,832

Selling, general andadministrative expenses

9,285

10,697

Operating income/losses

922(2,865)Non-operating income

2,342

5,347

Non-operating expenses

1,333

1,406

Ordinary income/losses

1,931

1,075

Extraordinary income

700

260

Current liabilities

Extraordinary losses

36,91047,119Noncurrent liabilities

33,80837,222

Total liabilities

70,71984,341

Net assets

41,05831,354

Capital12,88812,888

Capital surplus

14,80914,809

Shareholders’ equity

384

9,695

Income (losses) before income
taxes

2,247

(8,360)

Income taxes

2,224

1,213

Income (losses) before minority
interests

23(9,573)

Net income/losses

23(9,573)

Consolidated statement of cash flows(JPY in million)

FY2013

FY2014

(396)

(396)

Net cash generated fromoperating activities

2,426

2,238

3,648

7,267

Net cash expended ininvestment activities(4,020)(6,986)(%)

Valuation difference on
available-for-sale securities

97

131

Net cash generated fromfinancing activities

1,186

4,860

5

Deferred gains orlosses on hedges

(81)

(161)

Foreign currencytranslation adjustment

378

619

3,765

7,453

The effect of changes in the exchange
rate on cash and cash equivalents

Remeasurements ofdefined benefit plans

(133)

(155)

Net increase (decrease) in cash
and cash equivalents

(29)

731

Total net assets

44,707

38,622

Cash and cash equivalents at the
beginning of the period

8,788

8,759

Total liabilities and net assets

115,426

122,963

Cash and cash equivalents at theend of the period

8,759

9,490

-10
2012/390,895

Treasury stocks-5-5,00079,231

4,052(Forecast) 00

Net sales

13,756

million yen

5,000

FY2014

Liabilities

Cumulative other comprehensive
income(in million yen)

FY2013Retained earnings

Net income / Net margin(9,573)(JPY in million)(April 1, 2013 to March 31, 2014) (April 1, 2014 to March 31, 2015)(As of March 31, 2015)

Current assets

Property, plant and equipment

Consolidated statement of income

End of FY2014

Assets(in million yen)

-10,000(JPY in million)-15
2016/3(April 1, 2013 to March 31, 2014) (April 1, 2014 to March 31, 2015)

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Global network

Meiko’s production and sales systems thatmeet global customer needs
Meiko Electronics Europe GmbH

Production base
Sales Bases

R&D base

Affiliated Companies

Shanghai Sales Office
Meiko Electronics America, Inc.

Tianjin Sales OfficeWuhan Plant(Meiko Electronics (Wuhan) Co., Ltd.)

Taiwan Branch

Guangzhou Plant(Meiko Electronics (Guangzhou Nansha) Co., Ltd.)

Yamagata Factory(Yamagata Meiko Electronics Co., Ltd.)Guangzhou Sales Headquarters
Overseas Sales Department

Ishinomaki
Factory

Omiya Sales Office

Meiko Electronics Vietnam Co., Ltd.

Meiko Tech Yokohama Branch Office

Fukushima
Factory

Nagoya Sales Office
Headquarters
Meiko Electronics Thang Long Co., Ltd.

Osaka Sales Office

M.D. Systems Co., Ltd.

1st PCB Sales Dept.

Meiko Tech Osaka Head Office

2nd PCB Sales Dept.

Meiko Elec. Hong Kong. Co., Ltd.
Yamato Office
MDS Circuit Technology, Inc.

Kanagawa Factory

Solder Stencil Dept.
EMS Dept.

High-Performance
PCB Sales Dept.
Research andDevelopment Dept.

Yamato Technology Center

05

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Corporate Data (as of Mar. 31, 2015)
Corporate Profile

Stock Information

Shareholders’ Information

Name

MEIKO ELECTRONICS CO., LTD.

Number of Shares Authorized

63,200,000 shares

Established

November 25, 1975

Number of Shares Issued

Headquarters

5-14-15 Ogami, Ayase, Kanagawa

Capital12,888 million yen

Number of Shareholders

No. of Employees

10,895 (consolidated)(Japan: 862; overseas: 10,033)

Principal Shareholders

Outline of Business

Design and manufacturing and sales of
PCBs and auxiliary electronics business

26,174,076 shares(excluding treasury stock of 629,244 shares)

Name of Shareholder

6,936

Number of Shares held
(thousands of shares) % of shares held

4,699

18.0

PLEASANT VALLEY

631

2.4

Meiko Kosan Co., Ltd.

608

2.3

Yuho, Ltd.

521

2.0

Haruyuki Naya

488

1.9

Director and Senior Managing Executive Officer Takahide Hirayama

SBI SECURITIES Co., Ltd.

482

1.8

Director and Senior Managing Executive Officer Masakuni Shinozaki

Seiichi Naya

442

1.7

Director

Kunihiko Sato

437

1.7

Director

Marc Schweizer

BNY GCM CLIENT ACCOUNTJPRD AC ISG (FE-AC)

Director

Yoon Ho, ShinHILLCREST, L. P.

379

1.5

Senior Corporate Auditor

Hitoshi Iyomoto

Sumitomo Mitsui Banking
Corporation

377

1.4

Executives(As of March 31, 2015)

President & CEO

Yuichiro Naya

Director and Senior Managing Executive Officer Seiichi Naya

Audit & Supervisory Board Member Hiroshi Tsukii
Audit & Supervisory Board Member Yasunobu Koshimura

Yuichiro Naya*The Company owns treasury stock of 629,244 shares and is excluded from theabove principal shareholders.
The percentages for the total number of issued shares have been calculated after
excluding treasury stock.

Affiliated Companies
Yamagata Meiko Electronics Co., Ltd.
M.D. Systems Co., Ltd.
Meiko Tech Co., Ltd.
Meiko Electronics (Guangzhou Nansha) Co., Ltd.
Meiko Electronics (Wuhan) Co., Ltd.
Meiko Elec. Hong Kong. Co., Ltd.
Meiko Electronics Vietnam Co., Ltd.
Meiko Electronics Thang Long Co., Ltd.
MDS Circuit Technology, Inc.
Meiko Electronics America, Inc.
Meiko Electronics Europe GmbH

Manufacturing of PCBs
Design of PCBs
Sales of PCBs
Manufacturing and sales of PCBs
Manufacturing and sales of PCBs
Sales of PCBs
Manufacturing and sales of PCBs
Manufacturing of PCBs
Design of PCBs
Sales of PCBs
Sales of PCBs

April 1 to March 31 of the following year

Annual Shareholders’ June
Meeting
Record dateYear-end dividends: March 31
Interim dividends: September 30

Method of public
noticeElectronic public notice. In the event of an
accident or other unforeseen events thatprevent publication of the electronic public
notice, it will be published in The Nikkei.
Official page:
http://www.meiko-elec.com/ir/pa.shtml

Stock exchange

JASDAQ (Standard), Tokyo Stock Exchange

Administrator of shareholders 1-4-1, Marunouchi, Chiyoda-ku, Tokyo, Japan
register and special account Sumitomo Mitsui Trust Bank, Limited
management institution
Handling office of
1-4-1, Marunouchi, Chiyoda-ku, Tokyo, Japan
Administrator of
Stock Transfer Agency Business Planningshareholders register Dept., Sumitomo Mitsui Trust Bank, Limited(Mailing Address)(Inquiries by telephone)

168-0063
2-8-4, Izumi, Suginami-ku, Tokyo
Stock Transfer Agency Business Planning
Dept., Sumitomo Mitsui Trust Bank, Limited
0120-782-031(Website)
http://www.smtb.jp/personal/agency/index.html

Distribution of Ownership among Shareholders
Individuals and others

Fiscal Year

64.0%

Foreign institutions and others 13.3%
Financial institutions

8.9%

Other institutions

6.0%

Financial instruments business operators

5.5%

Treasury stock

2.3%

Inquiries about notices such as a change ofaddress concerning shareholdings
Shareholders who have accounts with securities companies
are advised to contact the securities company with regard to
notices, such as a change of address.
Shareholders who do not hold accounts with a securities
company are advised to contact the above telephone number
for inquiries.

MEIKO REPORT

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Introduction of Meiko Website

MEIKO
NEWS

Future Cars and Meiko

ComfortWhen car navigation systems first appeared, somepeople were surprised at the convenience of asystem that enabled the driver to drive a vehicle
even in unfamiliar places without consulting a map.
But these days, it is not surprising for a car
navigation system to show the driver the roadahead and at the same time distribute in realtime the information that the driver seems to beinterested in.
Top page

Environment
As a result of the further development of ecofriendly cars, automakers have now begun to sellelectric vehicles and hydrogen-fueled vehicles toreplace fuel-efficient hybrid vehicles.
SafetyThe pursuit of safety has led to making a drivesupport system the standard equipment, and thus,
drivers can enjoy a safe drive without dependingon their driving technique.

The evolution of cars is unlikely to end. It is expected that in 10 years or less, the day will come when automobiles will be driven fully automatically.
Then cars will become a tool to convey people safely according to the driver’s will, as well as serve as a multi-functional communication device similar to a smartphone.
Toward the future

CSR Report

Introduction of our products(A Lot of MEIKO around You)For our latest IR information, news releases,
and other information including details on our
products and CSR activities, please visit theCompany website.
You can visit the Company website to findother useful information as well.

MEIKO

Searchhttp://www.meiko-elec.com/

Headquarters
URL:

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5-14-15, Ogami, Ayase, Kanagawa 252-1104, Japan
Tel: 0467 (76) 6001 (switchboard)
http://www.meiko-elec.com/

Introduction of new technologies

Meiko will support cars for the future that will continue to evolve, with a wide range of extensive new PCB technologies,
domestic and overseas plants with high production capacity, and its 40-year history and extensive know-how.

“High-frequency hybrid PCB”
Cars that do not collide – ADAS technology
Advanced driver assistance systems, or ADAS,
provide the following functions: stopping a car
by applying the automatic brake just before
a rear-end collision with another vehicle, etc.;
maintaining a certain distance between a car
and the vehicle ahead of it; and controlling thesteering so that the vehicle is prevented fromdrifting out of the driving lane.

PCBs for ADAS
The ADAS necessitate various technologies, ranging
from sensors to image processing engines. The
obstacle detection radar uses a PCB that employs a
special high-frequency material. Featuring excellent
transmission characteristics, the high-frequency
material is highly resistant to bad weather, and can beused for high-performance car-mounted devices, suchas radar that can detect an object in the distance.

RF material
FR-4(FR-4 laminate)

RF material*1

RF Hybrid PWB*2

Non-TH construction

Meiko’s new technologies – Reduced costs and improved wiring flexibility
Meiko has added a further improvement to the high-frequency material PCB, resulting in thedevelopment of a “high-frequency hybrid PCB(*1)”. The Company has realized lower costs and better
wiring flexibility for high-frequency hybrid PCBs, by laminating an expensive high-frequency material andan ordinary material using its proprietary technology and forming a non-through hole structure(*2).

Mei ko w i l l co n d u ct R &D an d s u p p o r t y o ur f ut ure while c o nsid e r ing y o ur v a r ie d ne e d s.

Notes on Forecasts
The information in this report contains future forecasts, such as the plans and business results of the Company. These forecasts are based on information available
at the time when these forecasts were made and certain preconditions that the Company believes to be reasonable. Please note that actual business results may
differ from the forecasts herein due to a variety of factors.

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