nms Holdings Corporation
Overview of Financial Results
for the First Half of Fiscal Year Ending March 31, 2019
November 16, 2018©nms Holdings Corporation1

nms Holdings Corporation
Overview of Financial Results
for the First Half of Fiscal Year Ending March 31, 2019

(JASDAQ 2162)● Net sales and profits rebounded in the Power Supply Business (PS Business), following
the previous hiatus in demand, owing to new orders for the main power supply products
and the start-up of mass production. The EMS Business saw a decline in demand formachine tool-related products and overseas household appliances upon entering thesecond quarter, but net sales were strong overall.
● Operating income declined YoY overall. This was due to a delay in production plans in the
PS Business during the second quarter due to difficulty in procuring parts, in addition toadvance investment costs incurred in the Human Resource Solution Business (HSBusiness) in relation to contracting foreign technical trainees, and the establishment of athird party logistics contracting and technical logistics processing company.
 Profit attributable to owners of parent declined from the first half of last fiscal year, during
which extraordinary income of ¥221 million was posted for a gain on sale of investment
securities, etc. Operating income also declined during the first half of the current fiscal
year and the gain on sales of non-current assets that the company had expected torecognize during the first half was delayed to the second half. We expect to post this gainon the sales of non-current assets during the third quarter.
[Financial Performance for the First Half of Fiscal Year Ending March 31, 2019]

Net sales

Operating income

Ordinary income

Profit attributable toowners of parent

Million yen

Million yen

Million yen

Million yen

27,719

239

220

62

2

1. Financial Performance Highlights for the First Half of Fiscal YearEnding March 31, 2019

(Million yen)

Net salesFirst HalfFYE Mar. 31, 2018
Results
First Half Results

26,93927,719First HalfFYE Mar. 31, 2019
YoY

Main Points

2.9%

Operating income

596

239

(59.8%)

Ordinary income

603

220

(63.5%)

Profit attributable toowners of parent

570[Ordinary income]Non-operating income: ¥266 million(Up ¥47 million YoY)
Non-operating expenses: ¥285 million(Up ¥74 million YoY)
[Extraordinary income]¥39 million(Down ¥182 million YoY)
[Extraordinary loss](Up ¥5 million YoY)

62

©nms Holdings Corporation¥48 million(89.0%)

3

2. Financial Performance Highlights by Segment(Million yen)

Net salesFirst HalfFYE Mar. 31,
2018 Results

First Half FYE Mar. 31, 2019

Results

YoY
Net sales: ％Profit: Million yen

8,268

9,155

10.7％

264

147

(116)

13,331

12,942(2.9%)

408

157

(251)

5,339

5,621

5.3%

125

182

57

HS Business
Segment income

Net sales

EMS
Business

Segment income

Net sales

PS Business
Segment income

Segment
Eliminations

Main Points
Domestic demand 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, andother 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 investment will continue next period andthereafter.
The period of adjustment to demand for existingproducts and the hiatus in the introduction of
products in new areas ended and we achieved asteady start to mass production of new orders,
resulting in growth in both net sales and segment
income. We also began shipping and delivery ofbattery packs.
Company-wide expenses attributable to theholding company.

Segment income

Net sales

(200)

(247)

(47)

26,93927,719

2.9%

596

239

(357)

* These expenses were not allocated to the individual
segments due to the migration to a holding company
structure and have thus been eliminated fromsegment profits.

Total
Segment income* HS Business: Human Resource Solution Business; EMS Business: Electronics Manufacturing Service Business; PS Business: Power Supply Business©nms Holdings Corporation

4

(For Reference) Financial Performance by Segment: HS BusinessJapan

In the manufacturing worker dispatch/contract manufacturing business, we built a framework
for utilizing foreign human resources, including foreign technical trainees by making
employees full-time employees, enhancing benefits, and improving hiring ability andretention. We will take steps to expand the market in the future.

Overseas

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
overseas. 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.

Net sales¥

9,155 million

Up 10.7％ YoY

Segment
income

The cost of advance investment for establishing a contracting business for foreign technical trainees,and establishing a third party logistics contracting and technical logistics processing company aimed
at future market expansion puts pressure on profits, but we will work to reap the results quickly andimprove profitability.
(Million yen)
10,000(Million yen)

500

9,155
8,268

[Business Entity]
Nippon Manufacturing
Service Group

264

Segment income

5,000

Net sales

Net sales

Down ¥116 million YoY(Down 44.1%)

250

147

Segment income

147 million

¥

0

0

First HalfFYE March 31, 2018©nms Holdings Corporation

First HalfFYE March 31, 20195

(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

12,942 million(Million yen)
15,00013,331500

12,942408

Segment income

157 million¥

Down ¥251 million YoY(Down 61.5%)(Million yen)

(単位:百万円)

10,0005,000

Segment income

Segment
incomeConstruction is progressing steadily on the plant in Vietnam, which is a new market for TKR.
TKR plans to bring the plant online in April 2019 and will work to expand demand in the new market.

Net sales

Down 2.9％ YoY

Net sales¥

157[Business Entities]• SHIMA ELECTRONIC
INDUSTRY Group• TKR Group00First HalfFYE March 31, 2018©nms Holdings Corporation

First HalfFYE March 31, 20196

(For Reference) Financial Performance by Segment: PS Business• Both segment sales and income increased, due in part to the steady start of mass
production of new orders and increase in the shipment of sample products as thesegment completed adjustments to demand for existing products and moved past the
hiatus in introduction of new products for new areas.
• 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.
• 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.

Overall

Net sales

5,621 million

Up 5.3％ YoY

Segment
income

The 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.
(Million yen)
6,000(Million yen)

(単位:百万円)
5,621

5,339

3,000

125

[Business Entity]
Power Supply Technology
CO., LTD.

Net sales

Net sales

Up ¥57 million YoY(Up 46.0%)

182
150

Segment income

182 million¥

300

Segment income

¥

0

0

First HalfFYE March 31, 2018©nms Holdings Corporation

First HalfFYE March 31, 20197

3. Financial Performance Highlights (B/S)(Million yen)March 31, 2018

September 30, 2018

ChangeMain Points

Current assets

20,434

21,145711

Non-current assets

6,061

7,042

980

Property, plant andequipment

4,505

5,553

1,048

Intangible assets

503

521

17

1,053

968

(85)

Total assets

26,49628,188

1,692

Total liabilities

20,34522,5562,211

Current liabilities

13,58415,024

1,440

Non-current liabilities

6,761

7,531

770

Total net assets

6,150

5,632

(518)

Total liabilities and net
assets26,49628,188

1,692

Investments and otherassets©nms Holdings Corporation

Cash and deposits:
Notes and accounts
receivable – trade:
Inventories:(¥247 million)¥459 million¥302 million[Loans payable balance]¥2,965 million
Sep. 30, 2018: ¥13,601 million
Mar. 31, 2018:¥10,635 million

84. Financial Performance Highlights (Cash Flows)(Million yen)

1H FYE
March 31, 2018

1H FYE
March 31, 2019

Income before income taxes

781

211

Depreciation

347

396

Change in operating capital(982)(1,266)

Other

(218)

(378)

Net cash flow from operating
activities(71)(1,037)Purchase/sales of non-current
assets(151)(1,546)

Other

654

(73)

Net cash flow from investing
activities

502(1,619)431(2,657)

Change in loans payable

364

2,949

Payment of dividends, etc.

81

(428)

Net cash flow from financing
activities

446

2,521

Cash and cash equivalents at
end of period

4,135

4,213

Free cash flow

©nms Holdings Corporation

Main Points

Notes and accounts receivable – trade:(¥592 million)
Inventories: (¥307 million)
Accounts payable – trade: (¥367 million)

Expenditures for acquisition:(¥1,549 million)
Gains on sale: ¥2 million

Dividends paid: (¥77 million)
Acquisition of additional subsidiaryshares: (¥247 million)9５. Earnings Forecasts for Fiscal Year Ending March 31, 2019
(Figures disclosed on May 14, 2018)
 While the future remains uncertain, there is no change in the full-year earnings
forecasts disclosed on May 14, 2018 at the present time. We anticipate growthin acceptance and management services contracting, mainly for foreigntechnical trainees, and plan to increase production in the PS Business during
the second half.
 We will promptly disclose any revisions to forecasts based on future businesstrends, should the need arise.
FYE March 31,2017 Results(2 periods prior)FYE March 31,2018 Results(Previous period)

FYE March 31,
2019 Forecasts(Current period)

54,581

54,17261,000

12.6%

Operating income

974

1,292

1,300

0.6%

Ordinary income

561

1,506

1,550

2.9%

Profit attributable toowners of parent

493

1,188

1,100

(7.5%)(Million yen)

Net sales©nms Holdings Corporation

YoY

10

Summary of Strategic Measuresin Each Segment– Build a base for growth through strategic measures that
capitalize on the opportunities presented by change –©nms Holdings Corporation11

6-1. HS Business: Status Report on Measures (1H, FYE March 31, 2019)
Key
Use the growth in acceptance of foreign human resources as a good opportunity to quickly
Points complete the system of support for human resources upon acceptance, in getting established,
and after returning to their home countries, and create a virtuous cycle.
1
Growth in acceptanceof foreign humanresources

The revisions to the law on foreign technical trainees has
provided a tail wind for the nms Group, which possesses its own
infrastructure in Japan and overseas.

Send off

Acceptance

Build a network throughstrategic alliances with 8
government sendingorganizations in 7
countries

Roll out matching support
to gain entrance into
accepting entities in thegroup network

Management
services contracting
Offer support services
contracting for generalaffairs, personnel, labor,
benefits, and otherfunctions necessary for
accepting trainees

Education & training

Support after return
to home country

Provide support for rapid
establishment of trainees by
providing training andeducation before and after
entering the country andproviding training facilities
in Japan

Provide support for finding
jobs in fields andcompanies where trainees
can use the technical skills
they learned in Japan.

Measures Implemented During the First Half of Fiscal Year Ending March 31, 2019
Entering newmarkets

Breaking into theagricultural humanresources sector
Expansion of
education system● October 2018: Established nms Indonesia and launched business・ Entered alliance with AP2LN local government sending organizations and formulated a sending plan・ In Japan, we entered an alliance with the Japan Technical Education Organization (JATEO), an organization
which provides training for foreign technical trainees in the nms Group and an external supervisoryorganization and worked to build a foundation for the smooth acceptance and quick establishment of trainees.

● August 2018: Participated in the Eastern Hokkaido Regional Origination Conference
Worked to expand acceptance of foreign technical trainees in the agricultural sector and contributed to therevitalization of the regional economy.

● May 2018: Developed and began using the 3L System, a Japanese language training
system for Vietnamese human resources
Created educational programs for different cultures, manufacturing and nursing care skills, onsite education at
manufacturing plants, and other educational programs and rolled these out in other countries

Diversification ofhighly proficienthuman resources● From April 2018: Expanded the number of engineers registered and also expanded use
and dispatch of foreign human resources©nms Holdings Corporation

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6-2. HS Business: Status Report on Measures (1H, FYE March 31, 2019)■ Contribute to achieving cost-competitiveness for customers by entering the labor-saving device businessKeyand proposing the addition of staffing services.
Points2■ Expand business laterally by utilizing our expertise in manufacturing worker dispatch and contract
manufacturing.

Entrance into
the labor-saving
device business

Uniquecharacteristics of nms● April 2018: Entered manufacturing and sale of labor-saving devices with a highresolution camera from KEYENCE CORPORATION.

・ Substantially reduced worker hours previously used in visual inspection and contributed to the achievementof consistent quality management.
・ Pursued on-premises contracting while developing the devices as contracting service menus to meet needs
overseas. Inquiries are already increasing in Vietnam and China, and we also plan to roll this out in Thailand.
・ In the future, we will work to strengthen design and development capabilities and enhance the support
infrastructure to expand the business.

Contribute to improving
customer cost competitivenessby combining multiple
proposals with humanresource solutions

Strengthening
third-party logistics
contracting and technicallogistics processing

Staffing services
Production line
contracting● May 2018: Established an
operating company andaccelerated implementation

Established nms Logistics andTechnical solution Co., Ltd.
・ Built a new core business by utilizing our accumulated expertiseand track record in third-party logistics contracting and technicalservices to integrate the logistics contracting and technicalsegments.
・ Configured efficient logistics routes, supported innovative logistics
strategies, and provided advanced processing in logistics forvarious kinds of electronic devices.
・ Fully utilized the human resources business and group resources
to also meet customers’ needs in regard to challenges in thelogistics industry of flexible acquisition of human resources andfamiliarizing them with their work, and overall operating efficiency.

+

Production line
diagnostics &inspection

Launch a new
business insubstrate repair+

Design, manufacture,and installation oflabor-saving devices● June 2018: Obtained
certification as a Huaweicertified repair centerand rolled out
the businessnationwide

・ Worked to open certified repair centers under the “nms mobile”
business brand (7 centers: Hokkaido, Sendai, Shibuya, Yokohama,
Nagoya, Hiroshima, and Fukuoka)
・ Responded to the increasingly diversified repair needs ofcustomers in anticipation of rapid growth in SIM-free devices.
・ Rolled out a total solution to meet customers’ needs by partneringwith the logistics business on everything from parts management
to repair, after-service, and delivery.

©nms Holdings Corporation

13

6-3. EMS Business: Status Report on Measures (1H, FYE March 31, 2019)■ Expand business opportunities by implementing a location strategy based on the acceleration of the moveKey
to fabless manufacturing in the manufacturing industry.
Points ■ Work to achieve differentiation by strengthening design and development capabilities and secure customers.

Constructionof a new plantin Vietnam● May 2018: Established TKR MANUFACTURING VIETNAM CO., LTD.
・ Scheduled to begin production in April 2019 as the Vietnam business location of the TKR Group.
・ The plant will consist of a press plant and a mount assembly plant on a 40,000 m2 lot. The press plant iscurrently under construction and construction is proceeding according to schedule.
・ We will build a flexible production structure that divides functions with the location in Malaysia.
Conceptual drawing of completed plant
Ba Thien II Industrial Park
The main customers are located nearby,
and the location offers many advantages
from the perspectives of securing humanresources and logistics.

nms Vietnam

Steady progress on construction

Strengthening
the functionsof the locationin China● September 2018: Established R&D center in Dongguan, China and strengthened thedesign and development structure
・ Worked to differentiate the business by strengthening the design and development structure at TKR HUANAN
ELECTRONICS CO., LTD (DONG GUAN), the production location of the TKR Group in China, to improve product andparts design capabilities.
・ Also implemented labor-saving measures on production lines in the plant, worked to roll these out to other locations,and pursued other initiatives aimed at improving cost competitiveness.

©nms Holdings Corporation

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6-4. PS Business: Status Report on Measures (1H, FYE March 31, 2019)■ Transform the business into a growth business by strengthening existing businesses and entering growthKeymarkets.
Points ■ Work to enter new areas and new markets, using energy management to create an opening.

Beginningbattery packsupply● October 2018: Began supplying lithium-ion battery packs for the Nissan NV350
Caravan “glamper van” (glamorous camping)・ The Nissan NV350 Caravan “glamper van” is equipped with a lithium-ion battery that enables use of a wide
variety of electronic equipment such as A/C, AV equipment and kitchen appliances. It is a camper that is a step
above the rest.
・ The battery pack, which was developed by Power Supply Technology Co., Ltd. (PST), is the power source forvarious kinds of equipment and provides proper control of charging and storage (battery management).
・ Based on the delivery track record, the number of inquiries for various kinds of industrial equipment isincreasing and we are expanding sales while also keeping an increase in battery capacity in mind.

PST Lithium-ion secondary battery pack

NV350 Caravan

NV350 Caravan “glamper van” equipped with a lithium-ion battery(Source: NISSAN MOTOR CORPORATION)©nms Holdings Corporation

15

Assemble group resources and bring
Japanese manufacturing quality to the world.

Next Stage >>Take advantage of the good opportunities presented
by the changing market environment.
Use the strength of our diversified business structure to
implement total solutions.

2018 ⇒ 2020

Provide high-quality Japanese manufacturing to
the world that is matched to the diverse range ofcustomer needs.

Production
efficiency

Development

2017

Burdenreduction

Worker’s
Skill up

PS

EMS

Sales

Power Supply
Business

Electronics
Manufacturing Service
Business

2010

2014

Manufacturing

nms
Holdings
Corporation
established

1985
HS

Board
Mounting
Processing

Unit
Assembling

Designing

Finishedproduct
Shipment

Human Resource Solution Business©nms Holdings Corporation

16

(For Reference) nms Group: Three Business Segments

Bringing Japanese Manufacturing Quality to the WorldThis is the rallying cry of the nms group.
Our business is a combination of three business segments that meet the many different needs of ourcustomers, from the Human Resource Solution Business, to the EMS (Electronics Manufacturing Service)Business which performs contract manufacturing and achieves production efficiency, and the Power
Supply Business, which engages in the development, manufacturing, and sale of power sources that
ensure the safety and security of many types of equipment.

ＨＳ

ＥＭＳ

ＰＳ

Human Resource
Solution BusinessElectronics Manufacturing
Service Business

Power Supply
Business

Staff members who are highly knowledgeable
about products, manufacturing processes andproduction sites are taking an active role in eachregion of Japan, China and ASEAN member
countries.

This business implements total solutions that
help customers to improve their competitive
strength.

This business offers improved solutions that area step above the rest with our technicalexpertise as a dedicated power source
manufacturer.

Legal Entity

Legal Entity

Legal Entity

Nippon Manufacturing
Service Corporation

SHIMA ELECTRONIC
INDUSTRY CO., LTD.
TKR Corporation

Power Supply
Technology CO., LTD.

© nms Holdings Corporation

17

(For Reference) nms Group Business Structure

Main Consolidated Subsidiaries

Countries/
Regions
Entered(fiscal year end for each company listed inparentheses)

Main Business Activities

Human Resource Solution Business (HS Business)•••

Nippon Manufacturing Service Corporation (Mar.)
Sino-Japan Stafftraining and Dispatch Co., Ltd. (Dec.)
Sino Manufacturing Service Corporation (Dec.)

Japan
China
VietnamThailand•••Worker dispatch for manufacturing
Customer service for repairs
Dispatch of engineers

Electronics Manufacturing Service Business (EMS Business)••

SHIMA ELECTRONIC INDUSTRY CO., LTD. (Dec.)
TKR Corporation (Dec.)

Japan
Hong Kong(China)Malaysia•

Japan
Hong Kong(China)••Electronics Manufacturing Service business (substrate mounting,substrate assembling, simple pressing, resin molding, assembly,
etc.)
Labor-saving Device Manufacturing/Sales business

Power Supply Business (PS Business)••

Power Supply Technology CO., LTD. (Dec.)
TKR Corporation (Dec.)•••

Custom power supply (low/high-voltage): development, design,
manufacturing, sales
Magnet roll: development, design, manufacturing, sales
A wide variety of transformers (switching/high-voltage
transformers): development, design, manufacturing, sales
Development, design, manufacture and sale of battery management
system related products© nms Holdings Corporation18

(For Reference) nms Group Overseas Expansion

Integrate the unique characteristics of each business andcapture new demand
Overseas
FYE Mar.
55％

2018
Sales
Composition

China・HongKong

Japan
45％

TKR HUANAN ELECTRONICS CO., LTD (DONG GUAN)
PST HUANAN ELECTRONICS CO., LTD (Foshan)
PST HUANAN ELECTRONICS CO., LTD (Foshan) SHENZHEN OFFICEPST HUANAN ELECTRONICS CO., LTD (Foshan) SUZHOUOFFICE)

nms (Thailand) Co., Ltd.
Amata City BranchNava Nakorn Branch
Amata nakorn Branch

TKR HONG KONG LIMITEDPower Supply Technology CO., LTD. HONG KONG Branch

NMS Lao SoleCo., LTD.

Malaysia

EMS

PS

Sino-Japan Stafftraining and Dispatch Co., Ltd.
Sino Manufacturing Service Corporation
Dongguan office Shenzhen office
Wuxi office
Guangzhou office
Huizhou office
Shanghai office

Thailand・Cambodia・Laos

Representative officeof nms (Thailand) Co., Ltd.

EMS

PhilippinesEMS

TKR MANUFACTURING PHILIPPINES INC.

Viet NamNMS INTERNATIONAL RESOURCES CO., LTD.
NMS VIETNAM CO., LTD.
TKR MANUFACTURING VIETNAM CO., LTD

SHIMA ELECTRONIC INDUSTRY (MALAYSIA) SDN. BHD.
TKR MANUFACTURING (MALAYSIA) SDN. BHD.
TKR PRECISION (MALAYSIA) SDN. BHD.

Indonesia

PT. NMS CONSULTING INDONESIA© nms Holdings Corporation

19

(For Reference)

Corporate Profile
http://www.n-ms.co.jp/english/

Company Name

nms Holdings Corporation

Head Office

Tokyo Opera City Tower 45F, 3-20-2 Nishi-shinjuku, Shinjuku-ku,
Tokyo 163-1445, Japan

Representative

Fumiaki Ono, President and CEO

Capital500,690,000 yen (as of April 1, 2018)

Stock Exchange
Listings

Tokyo Securities Exchange (JASDAQ market)
Securities Code 2162

Business Activities

Integration of group businesses, management of operations, etc.
in the Human Resource Solution (HS) Business,
Electronics Manufacturing Service (EMS) Business, andPower Supply (PS) Business

Main Consolidated
Subsidiaries

Nippon Manufacturing Service Corporation
SHIMA ELECTRONIC INDUSTRY CO., LTD.
TKR Corporation
Power Supply Technology CO., LTD.
©nms Holdings Corporation

20

None of the information in these materials constitutes a solicitation to purchase or sellshares in nms Holdings Corporation.
The financial forecasts and other forward-looking statements in these materials are basedon information available at the time these materials were produced as well as certain
assumptions deemed reasonable by the company. Actual results may differ substantially
due to various risks and uncertainties.
nms Holdings Corporation does not make any recommendations, warranties, etc.
concerning the information contained in these materials, and accepts no liability whatsoever
for any damages incurred.
Contact for inquiries:
nms Holdings Corporation
Corporate Communications & IR Dept.
Tel: +81-3-5333-1737
E-mail: nms-ir@n-ms.co.jp©nms Holdings Corporation

21