nms Holdings Corporation(JASDAQ 2162）
Overview of Financial Results
for the Third Quarter of Fiscal Year Ending March 31, 2019
● Net sales
The EMS Business saw a decline in demand for machine tool-related products and overseas household
appliances. However, the Power Supply Business (PS Business) saw new orders for the main power
supply products and the start-up of mass production for those products following the previous hiatus
in demand. The Human Resource Solution Business (HS Business) also saw firm demand, mainly inthe domestic human resources business. This led to YoY growth in net sales.
● Operating income
Operating income declined YoY overall. Advance investment costs incurred in the HS Business inrelation to contracting foreign technical trainees and the establishment of a third party logistics
contracting and technical logistics processing company depressed profits. Profits also came underpressure from start-up costs associated with NeoTechnology Inc., a company that dispatches
technicians which became a consolidated subsidiary of the nms Group during the third quarter of thecurrent fiscal year, as well as the decline in orders and steep rise in material prices in the EMS
Business and the PS Business due to deceleration in the growth in the Chinese economy.
 Profit attributable to owners of parent
Profit attributable to owners of parent declined due to the recognition of costs incurred in reforming
the business structure on top of the decline in operation income, and despite extraordinary income of¥156 million derived mainly from gains on the sale of non-current assets and investment securities.

[Financial Performance for the Third Quarter of Fiscal Year Ending March 31, 2019]
Net sales
Million yen

42,269Operating income
Million yen

300

Ordinary income
Million yen

312

Profit attributableto owners ofparent
Million yen

21111. Financial Performance Highlights Through the Third Quarter (April toDecember 2018) of Fiscal Year Ending March 31, 2019

(Million yen)

Third Quarter
FYE Mar. 31,2018 Results(Apr. to Dec. 2017)

Third Quarter FYE Mar. 31, 2019 (April to December 2018)
Results

Main Points

YoY[Net sales]

Net sales

40,72842,269

3.8%

Sales were firm in the HS Business and PSBusiness.
[Operating income]The decline in operating income was mainly
caused by the cost of advance investment
and the steep rise in material prices.

Operating income980

300(69.3%)[Ordinary income]Non-operating income: ¥404 million(Up ¥66 million YoY)
Non-operating expenses: ¥391 million(Up ¥187 million YoY)

Ordinary income

1,113

312

(71.9％)

924

211(77.2%)[Extraordinary income]Gain on the sale of investment securities:¥38 million
Gain on the sale of non-current assets:¥10 million
Gain on reversal of FX translation
adjustment: ¥91 million

Profit attributable toowners of parent[Extraordinary loss]
Cost of business structure reform:¥47 million©nms Holdings Corporation2

2. Financial Performance Highlights by Segment
Third Quarter
FYE Mar. 31,2018 Results(Million yen)

Main Points

Results

YoY

12,630

14,23912.7%

433

114(73.6%)

19,94919,051(4.5%)

543

320(40.9%)

8,148

8,978

10.2%

325

262

(19.4%)(Apr. to Dec. 2017)

Net sales

Third Quarter FYE Mar. 31, 2019 (April to December 2018)

HS Business
Segment income

EMSBusinessNet sales

Segment income

Net sales

PS Business
Segment income

Segment
Eliminations

Segment income

Net sales

Total
Segment income

(322)

(397)

―40,728

42,2693.8％

980

300(69.3%)

Domestic demand was firm, demand for thebusiness was firm despite the pressure on
profits from the cost of advance investment in a
new logistics-related company, a company toprovide training for foreign technical trainees,and other investments.
The pace of growth in demand decelerated formachine tool-related products and overseas
household appliances. Segment income declined
due to expenses associated with theestablishment of a manufacturing plant in
Vietnam, but steps will be taken to improveincome next period and beyond.
Segment income declined due to impact fromthe steep rise in material prices, but hiatus indemand ended, and new orders also
contributed to a rebound in sales.
We also began shipping and delivery ofbattery packs.
Company-wide expenses attributable to theholding company.
* These expenses were not allocated to theindividual segments due to the migration toa holding company structure and have thus
been eliminated from segment profits.

* HS Business: Human Resource Solution Business; EMS Business: Electronics Manufacturing Service Business; PS Business: Power Supply Business©nms Holdings Corporation3

(For Reference) Financial Performance by Segment: HS BusinessIn the manufacturing worker dispatch/contract manufacturing business, we worked toimprove hiring ability and retention by making employees full-time employees, utilizing
foreign technical trainees, and taking other steps. Demand remained firm.

JapanSegment
incomeDown 73.6％ YoY(Million yen)
15,0001,000

14,23912,630750
10,0005,000[Business Entity]
Nippon Manufacturing
Service Group(Million yen)

0500

433

Third Quarter
FYE Mar. 31, 2018©nms Holdings Corporation

250

Segment income

114 million¥The cost of advance investment in establishing a contracting business for foreign technicaltrainees, and establishing a third party logistics contracting and technical logistics processing
company, as well as the start-up costs associated with consolidation of a technician dispatch
company put pressure on profits. However, these costs were incurred as part of our growthstrategy and we will work to reap the results quickly and improve profitability.

Segment
incomeUP 12.7％ YoY

Net sales

14,239 million¥

Net sales

Net sales

China continued to see changes in the market environment and a rapid rise in personnel
costs and other expenses, but we stepped up efforts to expand local contract manufacturing
Overseasoverseas. In Vietnam and Thailand, we worked to promote combining expertise in the EMS
Business within the group, proposed the introduction of labor-saving measures, and took
other steps to promote new services and improve profitability.

114

Third Quarter
FYE Mar. 31, 201904

(For Reference) Financial Performance by Segment: EMS BusinessJapan

The pace of growth in machine tool-related demand slowed upon entering the second
quarter, but demand was firm for existing products in general.

Overseas

The pace of growth in household appliance-related demand slowed in Malaysia, while
demand in China was strong.

Net sales

19,051 million¥[Business Entity]
・ SHIMA ELECTRONIC
INDUSTRY Group・ TKR Group

19,94919,051

20,000750

543

15,00010,0005,000

500

Segment
incomeDown 40.9％ YoY

1,000

320
250

Segment income

320 million¥(Million yen)

(Million yen)
25,000Net sales

Segment
incomeTKR Corporation (TKR) will bring its new plant in Vietnam online in April 2019, and we also plan
to enter the North American and Mexican markets via the acquisition of the business from Sonyas announced on December 19, 2018, in an effort to further expand the business scale.

Net sales

Down 4.5％ YoY00

Third Quarter
FYE Mar. 31, 2018©nms Holdings Corporation

Third Quarter
FYE Mar. 31, 20195

(For Reference) Financial Performance by Segment: PS Business・ Sales rebounded, due in part to the steady start of mass production of new orders andincrease in the shipment of sample products as the segment completed adjustments todemand for existing products and moved past the hiatus in introduction of new products
for new areas.

Overall・ The power supply technology developed up to this point was used to launch the battery
management system business, and order inquiries were strong for LiB secondary battery
packs.

Net sales

・ The Matsusaka Factory in Mie Prefecture was opened on January 11, 2018 as adevelopment and mass production center for that. Production started in September 2018,
and deliveries began in October.

8,978 million¥UP 10.2％ YoY

500

6,000

4,000

1,000

325

262
250

Segment
income

5,000

2,000

Power Supply
Technology CO., LTD.

8,148

7,000

3,000

[Business Entity]

750

8,000

Net sales

Down 19.4％ YoY

9,000

8,978

Segment income

262 million¥(Million yen)

(Million yen)
10,000Net sales

Segment
incomeThe areas of application for battery packs are expanding, and we aim to grow net
sales and segment income through the two strategies of strengthening the businessbase and developing, manufacturing, and expanding sales of new products.

00

Third Quarter
FYE Mar. 31, 2018©nms Holdings Corporation

Third Quarter
FYE Mar. 31, 20196

3. Financial Performance Highlights (B/S)(Million yen)

Current assets

Non-current assets

March 31, 2018 December 31, 2018

Change20,43421,808

1,373

6,061

7,356

1,294

Property, plant andequipment

4,505

5,660

1,155

Intangible assets

503

539

36

1,053

1,155

102

Total assets

26,49629,164

2,667

Total liabilities

20,34523,5403,194

13,584

16,220

2,636

6,761

7,320

558

6,150

5,623(526)26,49629,164

2,667

Investment and otherassets

Current liabilities
Non-current liabilities
Total net assets
Total liabilities and net
assets©nms Holdings Corporation

Main Points
Cash and deposits:(¥92 million)
Notes and accounts
receivable – trade:¥500 million
Inventories:¥766 million

The increase was due toacquisition of theMatsusaka Factory in thePS Business.

[Loans payable balance]
Dec. 31, 2018:¥14,425 million
Mar. 31, 2018:¥10,636 million

74. Revision of Full-year Earnings Forecasts for Fiscal Year Ending March
31, 2019

We have revised the full-year earnings forecasts for fiscal year ending
March 31, 2019 disclosed on May 14, 2018 as follows, based on the trend
in performance.

(Million yen)FYE March 31,2018 Results(Previous period)

FYE March 31, 2019
Previous
Forecasts

Current
Forecasts

PercentagechangeNet sales

54,17261,00057,500(5.7%)

Operating income

1,292

1,300520(60.0%)

Ordinary income

1,506

1,550

510(67.1%)

Profit attributable toowners of parent

1,188

1,100

430(60.9%)©nms Holdings Corporation8