Financial Results for FYE 3/2018
Securities code: 4109

1. Financial Results for FYE 3/2018
 Basic Financial Data (Consolidated)
 Consolidated Statement of Income
 Non-operating Profit and Loss/Extraordinary Profit
and Loss
 Sales Revenue and Operating Profit by Business Quarterly Operating Profit
 Consolidated Balance Sheet Consolidated Cash Flows, Capital Expenditures,
Depreciation & Amortization, Research &Development Expenses
P.2

<Basic Financial Data (Consolidated)>
FYE 3/2018(In millions of yen)

ActualFYE 3/2017

Forecast*

Actual* Announced February 9, 2018

YoY

Vs. Forecast

Increase/
Decrease

Percentage
Increase/
Decrease

Increase/
Decrease

Percentage
Increase/
Decrease

Sales Revenue

33,62233,40029,850

3,772

12.6

222

0.7

Operating Profit

2,369

2,100

4,372

-2,002

-45.8

269

12.9

Ordinary Profit

1,756

1,900

4,154

-2,397

-57.7

-143

-7.6

Profit Attributableto Owners of
Parent

1,274

1,400

2,824

-1,549

-54.9

-125

-9.0

FYE 3/2018

FYE 3/2017(In millions of yen)

Increase/
Decrease

Total Assets

51,38852,081-693

Equity Capital

31,23328,0783,154Interest-bearing
Liabilities

10,857

13,967-3,109P.3

<Consolidated Statement of Income>YoY(In millions of yen)

FYE 3/2018

FYE 3/2017

Percentage
Increase/
Decrease

Increase/
Decrease

Sales Revenue

33,622

29,850

3,772

12.6

Gross Profit

6,592

8,199

-1,607-19.6

Gross Profit Margin (%)

19.6

27.5

-

-

SG&A

4,222

3,826

395

10.3

Operating Profit

2,369

4,372

-2,002

-45.8

7.0

14.6

-

-

1,756

4,154

-2,397

-57.7

1,803

3,815

-2,012

-52.7

1,274

2,824

-1,549-54.9

Operating Profit Margin(%)

Ordinary Profit
Profit before Income
Taxes
Profit Attributable to
Owners of Parent
P.4

<Non-operating Profit and Loss/Extraordinary Profit and Loss>■ Non-operating Profit and Loss

■ Extraordinary Profit and LossFYE 3/2018

FYE 3/2017

FYE 3/2018(In millions of yen)

(In millions of yen)

109

438

14
2

13
2

-

282

92

139

722

657

39

52

Share of loss of entities
accounted for using
equity method

120

5Foreign exchange losses

214

417

Loss on valuation ofderivatives

186

-

Other

162

181

Non-operating Profit
Interest income
Dividend income
Gain on valuation ofderivatives
Other

Non-operating
Expenses
Interest expenses

P.5

FYE 3/2017

Extraordinary Profit

285

31

Gain on sales of noncurrent assets

285

31

Extraordinary Losses

238

369

Loss on abandonmentof non-current assets
Loss on sales of noncurrent assets

206

271

0

0

Impairment loss-

98

Loss on sales ofinvestment securities
Loss on valuation of
investment securities

-

0

32

-

<Sales Revenue and Operating Profit by Business>
FYE 3/2018(In millions ofyen)(In millionsof(In millions of yen)
yen)

Breakdown][High-purity Chemical Business:

High-purity Chemical
Business

Sales
Revenue

Operating
Profit29,145Percentage Increase/
Decrease

FYE 3/2017

2,500

Sales
Revenue

Operating
Profit25,501

4,422

Sales
Revenue

Operating
Profit14.3

Surface Treatment

1,956

2,033

-3.8

Alternatives for CFCs

2,546

2,463

3.4

Batteries

5,069

5,072

-0.1

Semiconductors/LCDs

15,662

12,31027.2

Semiconductor Devices

693

527

31.3

Catalysts

919

854

7.6

Gypsum

72

94

-23.1

General products

1,267

1,342

-5.6

Other

958

803

19.4

Transportation Business
Medical Business
Other

P.6

-43.5

4,269

779

4,143

698

3.0

11.6

-

-960

-

-792

-

-

207

34

204

30

1.5

11.8

<Quarterly Operating Profit>(In millions of yen)

1,600

1,473

1,400
1,200
960

1,000

1,025
912

888

936

800
609

600
400
200

461

404
288
86

83

0

Sales Revenue(In millions
ofProfityen)
Operating

1Q
6,745
86

FYE 3/2016
2Q
3Q
7,057 6,789
288
404

4Q
6,918
609

Operating Profit
Margin1.3%

4.1%

8.8% 13.4% 15.2% 18.6% 11.5% 10.9% 10.9%

P.7

6.0%

1Q
7,187
960

FYE 3/2017
2Q
3Q
6,757 7,941
1,025 1,473

4Q
7,963
912

1Q
8,159
888

FYE 3/2018
2Q
3Q
8,561 8,314
936
461
5.5%

4Q
8,587
83
1.0%

<Consolidated Balance Sheet>(In millions of yen)

FYE 3/2018

FYE 3/2017

Increase/ Decrease

26,32428,069-1,745

Cash and Deposits

9,192

14,361-5,169Notes and Accounts
Receivable - trade

9,753

7,867

1,885

25,06324,011

1,051

Property, Plant andEquipment

21,65422,072-418

Intangible Assets

144
3,265

129
1,808

14
1,456

10,617

12,566-1,949

Short-term Loans
Payable

1,860

2,320

-460

Long-term Loans Payable
within 1 year

2,794

3,684

-889

8,285

9,998

-1,712

6,203

2,000
5,962

-2,000241

32,48529,516

2,968

Shareholders' Equity

30,76827,771

2,996

Liabilities and Net Assets

51,38852,081-693

Current Assets

Non-current Assets

Investments and Other Assets

Current liabilities

Non-current liabilities
Bonds Payable
Long-term Loans Payable

Net Assets

P.8

<Consolidated Cash Flows, Capital Expenditures, Depreciation & Amortization,
Research & Development Expenses>(1) Consolidated Statement of Cash FlowsFYE 3/2018

FYE 3/2017(In millions of yen)

Cash flows from financing activities

937-4,673-3,735-1,4005,341-1,814
3,526
531

Net increase (decrease) in cash and cash
equivalents-5,2384,014

14,1698,930

10,154
14,169Cash flows from operating activities(*1)

Cash flows from investing activities(*2)

Free Cash Flows(*1 + *2)

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

(2) Capital Expenditures, Depreciation & Amortization, Research & Development Expenses(In millions of yen)

Capital Expenditures
Depreciation & Amortization
Research & Development Expenses
P.9

FYE 3/2018

FYE 3/2017

2,991
3,344
1,484

2,328
3,117
1,274

2. Financial Forecast for FYE 3/2019
 Financial Forecast
 Forecast by Segment

P.10

<Financial Forecast>(In millions of yen)

FYE 3/2019 Full-year
forecast

FYE 3/2018 Full-year
results

FYE 3/2017 Full-year
results

Sales Revenue

37,70033,622

29,850Operating Profit

2,600

2,369

4,372

Ordinary Profit

2,800

1,756

4,154

Profit Attributable to
Owners of Parent

1,700

1,274

2,824

Current Net Profit
Per Share (yen)131.65100.49234.56

CapitalExpenditures

3,983

2,991

2,328

Depreciation &Amortization

3,414

3,344

3,117

Research &Development
Expenses

1,629

1,484

1,274

P.11

<Financial Forecast by Segment>(In millions
ofof yen)(In millions
yen)

Breakdown][High-purity Chemical Business:

High-purity Chemical
Business

FYE 3/2019 Full-year
forecast

FYE 3/2018 Full-year
results

Sales
Revenue

Sales
Revenue

Operating
Profit33,1102,930

FYE 3/2017 Full-year results

Operating
Profit29,145

2,500

Sales
Revenue

Operating
Profit25,501

Surface Treatment

2,110

1,956

2,033

Alternatives for CFCs

3,080

2,546

2,463

Batteries

4,700

5,069

5,072

Semiconductors/LCDs

19,24015,662

12,310

Semiconductor Devices

600

693

527

Catalysts

920

919

854

Gypsum80

72

94

General products

1,650

1,267

1,342

Other

730

958

803

Transportation Business
Medical Business
Other

P.12

4,422

4,380

680

4,269

779

4,143

698

-

-1,050

-

-960

-

-792

210

30

207

34

204

30

3. STELLA CHEMIFA CORPORATION
 Corporate Profile/Sales Office Locations/Plant Locations(as of March 31, 2018)
 List of Affiliated Companies
 High-purity Chemical Business

P.13

<Corporate Profile/Sales Office Locations/Plant Locations (as of March 31, 2018)>
 Corporate profile
Corporate name:Head Office:FoundedEstablished
Capital fund
Representatives

URL

STELLA CHEMIFA CORPORATION
Meiji Yasuda Seimei Osaka Midosuji Bldg. 10F,
4-1-1 Fushimi-machi, Chuo-ku, Osaka
February 1916
February 1944
4,829,782,512 yen
Chairperson, Representative Director:
Junko Fukada
President, Representative Director:
Aki Hashimoto
http://www.stella-chemifa.co.jp/

 Sales officeOsaka Sales Department
Tokyo Sales Department

Meiji Yasuda Seimei Osaka Midosuji Bldg. 10F,
4-1-1 Fushimi-machi, Chuo-ku, Osaka
Tokyo Tatemono Yaesu Building 2F, 1-4-16 Yaesu, Chuo-ku, Tokyo Factory addresses
Sanpo Factory
Izumi Factory
Kitakyushu Factory
P.14

7-227 Kaisan-cho, Sakai-ku, Sakai
1-41 Rinkai-cho, Izumiotsu
1-1 Kurosakishiroishi, Yahatanishi-ku, Kitakyushu

<List of Affiliated Companies>
Logo

AbroadAt home

Base

P.15

Corporate NameBusiness Segment

Head Office:STELLA CHEMIFA CORPORATION

High-purity Chemical
Business

Chuo-ku, Osaka

Blue Express, Inc.

Transportation BusinessSakai-ku, Sakai

Blue Auto Trust Co., Ltd.

Other BusinessSakai-ku, Sakai

Stella Pharma Corporation

Medical Business

Chuo-ku, Osaka

STELLA CHEMIFA SINGAPORE PTE
LTD

High-purity Chemical
Business

Singapore

STELLA EXPRESS PTE LTD

Transportation BusinessSingapore

Blue Express (Shanghai) International
Trade Inc.

High-purity Chemical
Business

China

Blue Express (Shanghai) International
Freight Forwarding Co., Ltd.

Transportation Business

China

Zhejiang Blue Star Chemical Co., Ltd.

High-purity Chemical
Business

China

FECT Co., Ltd.

High-purity Chemical
Business

South Korea

Quzhou BDX New Chemical Materials
Co., Ltd.

High-purity Chemical
Business

China

< Manufacture and Sale of High-purity Chemical Products>
Our products, fluorine compounds, have continued to be used in the manufacturing
process of various products.
Segment nameMain productApplications

Surface treatment

Hydrofluoric acid for industrial
use

Used for acid cleaning of stainless steel and for thinning
glass substrates for LCDs

Alternatives for
CFCs

Anhydrous hydrofluoric acid

Material for chlorofluorocarbon and fluorine resin

Batteries

Lithium hexafluorophosphate

Electrolyte for electrolytic solution of lithium-ion
secondary batteries

Semiconductors
and LCDs

High-purity hydrofluoric acid
High-purity bufferedhydrofluoric acid
High-purity fluoride (CaF2, PbF2,

Semiconductor
devices

General products

MgF2, AlF3 and others)

Cleaning solution for silicon wafers and LCDs
Solar batteries

Lens material for i-line steppers and cameras

Potassium fluoride

Auxiliary agent for manufacturing tantalum for tantalum
capacitors

Tin fluoride

Quasi-drug

P.16

Semiconductors and LCDs
 Features of our products and new products
 Result and Forecast of world semiconductor
market scale by product Development of a new memory market
 Maintenance and strengthening of quality edge
 Change of shipping volume of high-purity
hydrofluoric acid (semiconductors and LCDs)
 Boosting Production of Semiconductor
Chemicals
P.17

<Features of our products and new products>(1) With our ultra purification technology and ultra sensitive technology, we are able to supply the ultra-high-purity
hydrofluoric acid and the ultra-high-purity buffered hydrofluoric acid with the best quality in the world.
(2) Products Lineups are readied to respond the customer requirements, including like suppression of adhering
particles, and suppression of increased roughness of wafer surfaces, and others, for the semiconductor and
FPD manufacturing process.
Product name(Semiconductor and LCDs)

Ultra-high-purity hydrofluoricacid
Ultra-high-purity bufferedhydrofluoric acid
Buffered hydrofluoric
acid (BHF)

Description
The ultra-high-purity chemical used for wet etching and wet cleaning of silicon wafers
in manufacturing semiconductors, FPDs, solar batteries and MEMS.
The ultra-high-purity chemical mixed hydrofluoric acid and ammonium fluoride.
The chemical mixed 50% hydrofluoric acid and 40% ammonium fluoride solutions.

LL BHFBHF with various functionalities by adding a surfactant.

LAL BHF

BHF containing a surfactant which has achieved extended service life and other advantages by optimizing theconcentration of ammonium fluoride to 17to 20%, about a half the concentration of ammonium fluoride in general BHF.

BHF containing a surfactant and ammonium fluoride in a reduced concentration of 5%,

Ex-LAL BHF * New product which has achieved precipitation of crystal onto the equipment
HSN BHF* New product

Silicon oxide etchant with high selectivity for silicon nitride.

LPL BHF* New product

Silicon oxide etchant without damaging to silicon and poly-silicon absolutely.

P.18

<Result and Forecast of World Semiconductor Market Scale by Product>
Forecast(In millions of dollars)
450,000

The size of the semiconductor market is larger than
400 billion dollars.

400,000

22,490

Actual

350,000
300,000
250,000
200,000

18,201
27,571
8,036

20,17018,612

19,41829,868
8,502

33,256
8,816

31,994
10,821

106,437

106,526

108,433

21,49837,302

34,467
12,537

13,439121,240
115,858

98,805
101,413

108,467

150,000
100,000

85,92891,63390,75391,498The growth rate of the memory
market is over 60%.

50,00067,043

79,232

77,20576,767

2013

2014

2015

2016

122,918

134,327

2017

2018

0

Memory

Logic

Other

Sensor

Optoelectronics

Total Discrete

Source: World Semiconductor Trade Statistics Inc. (WSTS)

P.19

<Development of New Memory Market>
Manufacturer

Place of
Produced item
construction Base name

Wafer size

Xian

17 lines (II)3D-NAND

12 inches

18 lines

3D-NAND

12 inches

Wuxi

C2

DRAM

12 inches

Cheongju

M15

3D-NAND

N-Y2

3D-NAND

12 inches

Y6

3D-NAND

12 inches

Flushing in 1Q 2018

3D-NAND

12 inches

Under planning

Samsung Electronics
Pyeongtaek

SK Hynix

Yokkaichi

Toshiba Memory

Iwate
Intel

DalianFab 2

3D-NAND

12 inches

Micron Technology

Hiroshima

Fab 15DRAM

12 inches

Fujian Electronics & Information;
JHICC * Technology licensed by UMC

Quanzhou

Nitch DRAM

12 inchesDRAM

12 inches

3D-NAND

12 inches

Innotron Memory

Hefei

Yangtze River Storage Technology* Tsinghua Unigroup(YRST); YMTC acquired capital in XMC.

ProductionPlancapacity, etc.
Expansion from 130,000 wafers/month to 200,000
200,000
Operation in 2018
wafers/month wafers/month in 2019

ChengduExpansion to 300,000 wafers/month in 2018
100,000
wafers/month Additional investment up to 2021 planned
140,000
wafers/month
140,000
wafers/month
100,000
wafers/month

Operation of the new DRAM building in the second
half of 2018

Operation in the second half of 2018

80,000Under construction Introduction of equipment
wafers/month in February 2018
A new building under construction for the mass
160,000
wafers/month production of 1Xnm
60,000Operation in 2Q 2018
wafers/month
Flushing in 1Q and start of trial production in
125,000
wafers/month 2Q of 2018
50,000Equipment introduction in 2Q 2018
wafers/month

Large-scale investments are planned in new memory factories in East Asia including the Republic of Korea and China.
Demand for memory is growing in smartphone and mobile tablet applications, and the market is expected to expand in the future.

We pursue the sales to the memory market with active strategies.
P.20

<Maintenance and Strengthening of Quality Edge>◆
SA Grade HF quality ◆Product technology
generation≥45 nm28 nm≤16 nmOur product grade

SA/SA-X

SA-XX

SA-XXX
Succeeded inultra-high-purity

Metal impurities level<100 ppt< 10 ppt< 1 ppt

Management sizeof particle

0.2/0.1 um

0.05 um

0.03 um

Further strengthening particle managementwith introducing the World’s most advanced analytical instruments.

©RION CO., LTD.

Liquid-borne particle counter
P.21©Thermo Fisher Scientific K. K.

High resolution ICP-MS

<Change of Shipping Volume of High-Purity Hydrofluoric Acid
(Semiconductors and LCDs)>
90,000(Full-year)
83,42480,000

Sales volume (ton)70,00060,000(Full-year)
69,132(Full-year)
65,177(Full-year)
65,241(Full-year)
66,06950,00040,00030,000（2Q）
39,665（2Q）
34,199（2Q）
33,669（2Q）
32,698（2Q）
31,257FYE 2013

FYE 2014

FYE 2015

FYE 2016

20,00010,0000
P.22

FYE 2017

<Boosting Production of Semiconductor Chemicals>
The shipping volume of 83,424 t in 2017 is the largest figure in thepast.
The shipping volume in 2018 is expected to be 90,000 t.
To expand our share and strengthen the stable supply system

Establishment of the system that makes it possible tosupply 100,000 t/year in 2018

P.23

Batteries
 Features of our products Approaches of Countries toward Automobile
Businesses Global Market for Lithium-ion Secondary Batteries(LIB) Launch of electrolyte business for lithium-ion
secondary batteries in China
 Additive for lithium-ion batteries

P.24

<Features of Our Products>(1) Used as main material comprising the lithium-ion secondary batteries and commercialized ahead of othercompanies(2) Because of the product’s high purity, it is recently being used for high-performance lithium-ion secondary
batteries.
Product name

Description(related to batteries)

Lithium hexafluorophosphate

Electrolyte for lithium-ion secondary batteries
Electrolyte for other batteries

Lithium tetrafluoroborate

Electrolyte and additives for lithium-ion primary andsecondary batteries

Additive for batteries

Additive for lithium-ion batteries<Lithium hexafluorophosphate particle form>

P.25<Lithium tetrafluoroborate><Large-size container: 1 m3>

<Approaches of Countries toward Automobile Businesses>
Country/region

Course of action/policy

UK and France

The sale of gasoline and diesel-powered vehicles will
be banned by 2040.

Norway and Netherlands

The sale of gasoline and diesel-powered vehicles will
be banned from 2025.

China

It is required that new energy vehicles (NEV) accountfor at least 10% of automobiles to be sold in China in
2019.

India

Total ban on the sale of gasoline and diesel-powered
vehicles will be imposed to limit all automobiles sold in
India to electric vehicles by 2030.

U.S. (California)

A manufacturer selling more automobiles than thenumber specified by the state must sell zero-emission
vehicles (ZEV) at a fixed proportion of the total
number of vehicles sold.

P.26

<Global Market for Lithium-ion Secondary Batteries>
Prospects for 2017 and forecasts for 2018 and beyond(In trillion yen)

For ESS/UPS andbackup power supply
Exclusive to in-car
applications
Small, consumer use(cylinder, square, laminate
types)
2015

2016

2017

2018

2019

2020

2021

Demand for Lithium-ion batteries exclusive to in-car
applications is expected to grow further because of anincrease in global demand for environment-friendly
vehicles.

P.27

Source: Press release by
Fuji Keizai Management
Co., Ltd.

<Launch of Electrolyte Business for Lithium-Ion Secondary Batteries in China>
Outline* Converted at the rate of 1 Chinese yuan = 19 yen (as of October 27, 2015)

Name

Quzhou BDX New Chemical Materials Co., Ltd. (established in December 2015)

Head Office:17 Nianhua Road, Kecheng District, Quzhou City, Zhejiang Province, People's Republic of China

BusinesslineupResearch & development and production of Lithium hexafluorophosphate (LiPF6), byproducthydrofluoric acid for industrial use, hydrochloric acid, and other fluorine-containing chemical systemproducts and sale of in-house products and provision of related services

Capital fund

70 million Chinese yuan (1,330 million yen*)

Objectives

In China, continuous growth of lithium-ion secondary battery industry is anticipated. A local production
system is established to handle demand in China.

Details ofcooperation

Part of the manufacturing facilities of electrolyte for lithium-ion batteries is relocated to a joint company.
The joint company produces the electrolyte for lithium-ion batteries by the relocated facilities andmarkets the electrolyte in and outside China.

P.28

Stella: 25.0%; Quzhou NGF Chemicals Co., Ltd.: 75.0%

<Launch of Electrolyte Business for Lithium-Ion Secondary Batteries in China>■ Quzhou BDX New Chemical Materials Co., Ltd.

Product and material warehouse

Manufacturing building■ June 2017
Start of operation of manufacturing
facilities.
(Manufacturing capacity: 1,300 t/year at
maximum)
Evaluation by customers has been ongoing.
The sales to some customers started.

Utility building
P.29

<Additives for Lithium-ion Batteries><Schematic diagram of the inside of a Lithium-ion battery>
Electrolyte

Roles that additive play

Discharge

Positive-electrodematerial

ChargeSeparator

Negative-electrodematerial◆ High-temperature
endurance◆ High conductivity(low temperature)◆ Increased capacity◆ Low resistance◆ Flame retardance

The Solid Electrolyte Interface (SEI), where the electrodecomes in contact with the electrolyte, is important.

FYE 2012 FYE 2013 FYE 2014 FYE 2015 FYE 2016 FYE 2017 FYE 2018 FYE 2019
Actual FY Prospects
P.30

GMP-related GMP(Good Manufacturing Practice) Growth of GMP-compliant Products

P.31

<GMP(Good Manufacturing Practice)>
Standards for Manufacturing Control and Quality Control for Drugs and Quasi-drugs
Three principles: “Reducing human errors to the lowest level"“Preventing contamination and product quality loss"“Designing systems to assure high product quality"

Inside Izumi Factory (Izumi Otsu City)

P.32

Expanded to products related
to daily commodities

For manufacturing
semiconductors<GMP (Good Manufacturing Practice)><Examples of products for drugs>

Tin fluoride<Actions of fluorine on teeth>■ To suppress Streptococcus
mutans from producing acid
(Cavity prevention)■ To promote toothremineralization■ To form acid-resistant teeth(To form fluorapatite)

The GMP inspection
by USFDA for tin
fluoride, an active
ingredient of OTC
anticaries drugs,
was completed in
November 2017.

Official approval by apublic organization in the
U.S.
P.33

<Growth of GMP-compliant Products>
160

Trend in shipping volume of tin fluoride (T/year)

140
120
100
80
60

40
20
0

FYE 2016

P.34

FYE 2017
FYE 2018
Actual FYProspects

FYE 2019

4. Medical Business Corporate Profile (as of March 31, 2018)
 Development of New Radiotherapy Technology BNCT Establishment of Enrichment Technology/Features ofEnriched Boron/
Applications of Enriched Boron Compounds
 World’s First Accelerator-based BNCT Clinical Trial
 Participation in Development of Imaging Diagnostic
Technology
 Establishment of 18FBPA-PET Development System
P.35

<Corporate Profile (as of March 31, 2018)>
Corporate name: STELLA PHARMA CORPORATIONHead Office:3-2-7 Koraibashi, Chuo-ku, Osaka-shi, Osaka

Representatives Tomoyuki Asano, Representative Director and President
Established

June 2007

Capital fund

1.9 billion yen

Business lineup Research and development, manufacture and marketing, etc. ofdrugs and medical devices

Shareholders

STELLA CHEMIFA CORPORATION
Innovation Network Corporation of Japan
Sumitomo Heavy Industries, Ltd.

Capital fundSakai Drug Discovery Research Center(Naka-ku, Sakai-shi, Osaka)P.36

<Development of New Radiotherapy Technology -BNCT->
Boron Neutron Capture Therapy (BNCT) is a particle beam radiation therapy
which specifically damages cancer cells by making the best of the nuclear
fission reactions between boron 10 and thermal neutrons with small energy.

Administration of Boron-10(BPA) compound

Boron-10 compound (BPA) is
selectively brought into cancer
4He nucleus (α particle)
cells.
1.47 MeV

Prompt gamma ray
478 keV

9 μm

Thermal neutron
10B

4 μm

Irradiating with thermal
neutron ray causes Boron-10
to fission.
P.37

7Li Recoil nucleus

0.84 MeV

Cancer cells with Boron-10
compound (BPA) are selectively
destroyed.

<Establishment of Enrichment Technology/Features of Enriched Boron/Applications ofEnriched Boron Compounds>■ Establishment of enrichment technology
STELLA CHEMIFA established a mass production technology of 10B for the first time in Japan,
and in November 2000, the only enrichment plant in Japan was established.
10B

10B

Generation

Enrichment andseparation

10B

10B
10B

10B
10B
10B

10B
10B

10B

10B

<The only 10B enrichment plant in Japan> (completed in November 2000)■ Features of enriched boron
10B offers properties of remarkably high neutron absorption capacity, and by increasing 10B
concentration, the absorption capacity is improved significantly.

■ Applications of Enriched Boron Compounds
・ Neutron-absorbing material of spent nuclear fuel transportation and storage containers
・ Material of control rods of nuclear reactors and rack material of spent nuclear fuel pools
・ Excess reaction control of pressurized-water reactors by dissolving into primary cooling water.
・ Cancer drug for boron neutron capture therapy (BNCT)
P.38

<World’s First Accelerator-based BNCT Clinical Trial>
The world’s first clinical trials using the boron-based drug (SPM-011) developedby Stella Pharma and the accelerator-based irradiation system (BNCT 30)
developed by Sumitomo Heavy Industries have been on-going.

Phase II study for brain tumor

Phase II study for head and neckcancerAgainst the number of subjects to be tested,
BNCT irradiation has been completed formore than 95% of the cases. (As of the end of
April 2018)

Against the number of subjects to be tested,
BNCT irradiation has been completed for allcases. (As of the end of February 2018)<<Flow chart of assumption, from clinical trial to approval application>>
Phase I study

Phase II study

Neutron dose is increased stepwise tocheck safety.

Verification of the effect at thedetermined dose.

SPM-011 and BNCT30 were designated as the products subject tothe MHLW Prioritized Review System for innovative medicines“SAKIGAKE” in 2017.
This allows the drug and device to be given priorities in the
consultation and review process for approval, and hence weundertake efforts to speed up their development.
P.39

Approval application(scheduled)<Participation in Development of Imaging Diagnostic Technology -PET Diagnosis->
The “PET diagnosis” that attracts attention as a technology useful for the early
detection of cancers
We have undertaken the development of 18FBPA, which has been studied as a
new drug to be used for the technology.

Features of 18FBPA-PET☆ It is expected that 18FBPA-PET contributes to the development of BNCT because
the accumulation of the boron-based drug (BPA) against cancer can be checked
beforehand (before treatment).

Current BNCT scheme
BNCT
Cancerdiagnosis(CT, MRI)

Administrationof boron-based
drug (BPA)

Checking the accumulationof BPA(18FBPA-PET)

Radiation ofthermal neutron
beams(Left) MRI image of brain tumors(Right) 18F-BPA PET image of brain
tumorsPhoto: Courtesy of Professor Ono at Kyoto
University Research Reactor InstituteP.40

<Establishment of 18FBPA-PET Development System>
To implement this project, we have been conducting joint research with Osaka University,
National Cancer Center of Japan, and Osaka Prefecture University, through the following
projects adopted by the Japan Agency for Medical Research and Development (AMED).We
have also been proceeding with the specific development of an automated synthesis
equipment required for the commercialization jointly with Sumitomo Heavy Industries, Ltd.
“Project for Cancer Research
and Therapeutic Evolution”
adopted by AMED
Osaka Prefecture
University“Practical Research for
Innovative Cancer Control”
adopted by AMED

Osaka University

Stella Pharma
Joint development
agreement

Sumitomo Heavy
Industries
P.41

National Cancer
Center of Japan5. Transportation Business Corporate Profile (as of March 31, 2018)
 Transportation System by Cooperation with Domestic
Bases Overseas Bases International Intermodal Logistics System Future Activities

P.42

<Corporate Profile (as of March 31, 2018)>
Corporate name: BLUE EXPRESS CORPORATIONHead Office:10 Ohamanishi-machi, Sakai-ku, Sakai-shi

Representatives Kiyonori Saka, Representative Director and President
Established

June 1991

Capital fund

350 million yen

Business lineup Common motor trucking/International intermodal transport
Warehousing/Customs clearing agent/Sales, rental and leaseof containers, tanks, etc.
Automobile maintenance services / Business related to life
insurance and non-life insurance agent, etc.

URL

http://www.blue-express.co.jp/
P.43

<Transportation System by Cooperation with Domestic Bases>
Shipping
terminals
Sendai Office
Kanto Office
Yokohama OfficeShimizu Office
Nagoya Office
Ohama Office
Kobe Office
Kitakyushu Office

Customs
clearance sites
Yokohama OfficeOsaka Office
Ohama Office
P.44

Kitakyushu OfficeOpened in October 2014

<Overseas Bases>

China (Shanghai)Blue Express (Shanghai) International Trade Inc.
Blue Express (Shanghai) International Freight
Forwarding Co., Ltd.

Singapore
Stella Express (Singapore) Pte Ltd

P.45

<International Intermodal Logistics system>

StorageTransportation

 High-purity chemicals
 Poisonous and deleterious
substances Hazardous materials
 High-pressure gas
 General cargo, etc.

Customs
clearance

P.46

Container
service<Future Activities>■ To steadily expand business with first priority given to the improvement of customer satisfaction.
Further quality improvement of international intermodal logistics service■ To maintain continuous investment for further growth
Extension of hazardous substance warehouses, etc.
(construction started in April 2018)■ To further strengthen business operation base and revenue
base・Streamlining of compliance system, acquisition of humanresources
・Streamlining the integration of the Tokyo and Yokohama
offices into one (April 2018)

P.47

6. Future Activities
 Approaches to Advanced Energy Devices [1] Approaches to Advanced Energy Devices [2] Approaches to Advanced Energy Devices [3] Development of Fluoride Nanoparticles

P.48

<Approaches to Advanced Energy Devices [1]>Energy devices for which increases in demand are expected [1]Lithium-ion batteries

New additives for electrolytes of Lithium-ion batteries (LIBs)

New additives for electrolytes ofLithium-ion batteries (LIBs)a) Automobile
applications

P.49b) Residential
applications

User evaluation is continued

<Approaches to Advanced Energy Devices [2]>Energy devices for which increases in demand are expected [2]Next-generation secondary batteries

Appearance of sodium ion battery
prototypes (image)

P.50

Electrolyte for high-purity
Sodium-ion batteries

Promotion of sample work

<Approaches to Advanced Energy Devices [3]>Energy devices for which increases in demand are expected [3]Fuel cells

Fuel-cell vehicles

P.51

Residential units

Catalysts for high-performance fuel cells

To start of PR

<Development of Fluoride Nanoparticles>
Oral care

Antireflection film
Navigation

Heads-up display

Interior panels

Development of nano filler for dental composite
resin
A radiopaque fluoride nanofiller makes it easy toidentify the boundary ofdentin.

Roll-out to the dental
material market
Dental X-ray image

For example, for antireflection applications invarious in-car parts, it is expected for fluoride
nanoparticles to be used, which is a low
refractive index material
https://www.inverse.com/article/

P.52

A fluoride nano fillerthat transmits visible
https://clas-chemistry.uncc.edu/
light enables
aesthetic
dental treatments.
Image of teeth using fluoride fillers

7. Medium-term Management
Plan (FYE 3/2017 to FYE 3/2019)
Notice on modification of numerical targets
 Financial Highlights of FYE 3/2018
 Modification of Numerical Targets

P.53

<Financial Highlights of FYE 3/2018>
The business results of FYE 3/2018 show that, in the main semiconductor/LCD
sector, a dramatic increase in revenue was achieved because of the promptly
reinforced system for boosting production to respond to the increasing demandin the active semiconductor market; however, the price of the main raw material,
anhydrous hydrofluoric acid, sharply rose due to a severe short supply in the
Chinese market and the procurement price for the material remained at a recordhigh level, resulting in a decrease of profits.

(Plan/Results)(In millions of yen)

FYE 3/2018(plan)*FYE 3/2018(results)

Sales revenue(consolidated)

33,40033,622

Operating profit(consolidated)

2,100

2,369

* Announced February 9, 2018
P.54

<Modification of Numerical Targets>
After taking into consideration the trends in raw material prices and the market
environment in FYE 3/2019 based on the trends in the business results of FYE
3/2018, we have prospects that, although the effects of our top-priority action
item—passing on rising costs—and increasing shipping volume will contributeto an upturn in sales and an increase in profit, the target figures of profits
previously released will not be achieved because the prices of raw materials
that are expected to remain in the stratosphere will inevitably be affected.

(Before modification)(In millions of yen)

(After modification)

FYE 3/2019*(In millions of yen)

FYE 3/2019

Sales revenue(consolidated)

32,200

Sales revenue(consolidated)

37,700Operating profit(consolidated)

4,400

Operating profit(consolidated)

2,600* Announced on April 28, 2017
P.55

<Modification of Numerical Targets>
In the period of present medium-term management plan (FYE 3/2017 to FYE 3/2019), “profit” is secured
and increased by:◆ increased sales and profit in the high-purity chemical business◆ steady profit increase in the transportation businessWe will make◆ investments in research and development for starting up the medical business, and aim at achieving
the consolidated operating profit of 2.6 billion yen (operating margin of 6.9%) for the FYE 3/2019.

Numerical Targets of Medium-term Management Plan (Consolidated)
Sales (high-purity chemical)

Sales (transportation)

Sales (others)

Sales (in hundred millions of yen)

Operating profit (inhundred millions of yen)

400

44

350

300

275

336
299

200

100

231

50

44

45
40
35

41

24

150

377
43

42

250

Operating Profit

255

291

26

30
25

331

20
15

14

10

50

5

0

0
FYE 3/2016 (results)

P.56

FYE 3/2017 (results)

FYE 3/2018 (results)

FYE 3/2019

Corporate slogan

Beyond the Chemical
Beyond the Chemical

We are drawing upon the strengths in the chemical field whose
growth we have nurtured so far and moving toward even greater
development in the future.

High-purity chemicalbusiness field
P.57

Transportation
business field

Medical business
fieldItems related to the business forecast posted in this presentation material are created on the basis of theinformation available as of the date of announcement of this presentation material and do not guarantee any
future business achievements. The actual business achievements may differ from assessment figures due
to future events.
Please note that the description stipulated in this presentation material may be changed without any priornotice. We shall not assume any responsibility for any damages etc. resulting from any mistake in theinformation, etc. posted in this presentation material.
This presentation material is created to help you understand our businesses.
Please kindly note that it is your sole responsibility to make any decision on your investment.
P.58