ANALYST GUIDE FY2015. October <Contact for information on this material: Mr. Ohno, Administration Headquarters ( )>

Transcription

1 ANALYST GUIDE FY2015 October 2015 (Listed on the 1st Section of the Tokyo Stock Exchange; Code 7447) <Contact for information on this material: Mr. Ohno, Administration Headquarters ( )>

2 Agenda I About NAGAILEBEN II Financial Review FY2015 III Market Environment IV Forecast for FY2016 V Management Goals VI Rewarding shareholder-focused policies 1

3 I About NAGAILEBEN 2

4 Nagaism Time of 100 years has created our company spirit. Human Believing Concentrating Pursuing principal Started white robe business in Nagaism 1915 Started Business 1969 Founded Manufacturing Division 1971 Succeed in first polyester medical clothing in Japan 1994 Established distribution center in Akita 1995 Listed on JASDAQ Started new products for "care" 2001 Listed on 2nd TSE Profit Business model Market Contribution Creation of Social Value Management style Concentration Realization of high profitability with radical pursuit of efficiency 2003 Established distribution center in West Japan 2004 Acquired ISO9001:2000 Listed on 1st TSE 2005 Acquired ISO14001: New HQ Building Completed 3

5 Profit Reimbursement to Shareholders Continue stable dividend payment with payout ratio of 50% DPS will be 100 as 100th anniversaries Social Responsibility Job creation at Regional Community -Domestic: Akita -Overseas: China, Indonesia, and Vietnam Support for women -Products for nursing staff or a care worker -Work for women sewing staff Environmental Management -Acquired ISO14001 certification in COMPELPACK the surgical wear which enables hospital to reduce waste ( million) 3,500 3,000 2,500 2,000 1,500 1, Total dividend Share buyback Commemorative divident Regular dividend Net income To grow Steadily and Stably Nagaileben marked 100th anniversary in We will continue prizing our company spirit Nagaism, Support for Children specializing in medical / nurse / care business area, expanding Admired occupation for medical its market and developing best products for our customers. -Miffy s visits to children's hospitals -Lending hospital medical clothing for child 4

6 Outline Establish competitive position in medical clothing market -Approximately 60% market share in domestic medical clothing -Wide field, planning, manufacturing and marketing -Competitive product such as extensive products, custom-made program Highly profitability and strong balance sheet -Gross profit to sales 46.6% (as of FY2015) -Capital-to-asset ratio 89.2% -ROE 9.3% (%) Change of Gross profit to sales 20.8% (1980) 33.1% (1990) 45.3% (2010) 39.7% 30 (2000) Doctor, Dentist, Pharmacist*1 (2012) 690,000 people compare with ,000people Strong growing market Nursing Staff*2 (2013) 1,570,000 people compare with ,000people *1 Annual Report on Health,Labour and Welfere 2012, MHLW *2 Japanese Nursing Associations statistical data *3 Estimation of care workers' demand toward 2025 (June. 2015), MHLW MHLW: Ministry of Health, Labour and Welfare of Japan -Continue stable dividend payment with payout ratio of 50% -Acquisition of treasury stock (YEN) 1,100 Care workers*3 (2013) 1,710,000 people compare with ,000people Rewarding shareholder-focused policies 1, (YEN) Book Value Per Share (BPS)(left) Earnings Per Share(EPS)(right)

7 II Financial Review FY2015 6

8 Overview FY Income - Net Sales remained previous year approximately - Operating & Recurring income declined slightly from previous year 2 The Change of Business Environment - Market Condition: Being revised care service treatment fees negative, market condition was stable - Production Condition: Appreciation of the dollar against the yen Escalating material prices, rising sewing costs 3 Unusual Event in this term - Exchange-rate profit: 226m - Share purchased in January million shares, 1,500 million yen - DPS will be 100 as 100th anniversaries 7

9 Financial Highlights <Statements of Income> (millions of yen,%) FY2015 % Change To Forecast % Composition % Composition % Change Net sales 16, Gross profit 7, Sales, general, and administrative expenses 2, Operating income 4, Recurring income 5, Net income 3, [Overview] - Sales kept at the same level as the previous year. In 4Q, sales of healthcare products increased 21.2% year-on-year, catching renewal contracts which were postponed. Sales of products for patients and surgery grew steadily. There were postponed contracts and drop of sales in doctors' wear and utility wear. [Gross profit] y/y - 53 m(factor of decrease of Net sales: - 30m, Factor of decrease of profit ratio: - 23m) Gross profit to sales FY % FY % Boost of material cost and sewing cost (- 42m) Foreign Exchange rate: FY Yen/dollar FY Yen/dollar (- 94m) Overseas production ratio FY % FY % (+ 100m) [Sales, general, and administrative expenses] - The cost of 100th anniversaries: 25m. Increase of Depreciation related with New HQ 35m [Non-operating income] - FY2014 Exchange-rate profit: 87m, Profit on securities sold: 67m FY2015 Exchange-rate profit: 226m (Realized profit changing dollars to yen: 165m) [Extraordinary profit] -FY2014 Gain on sale of properties: 114m(old HQ Building), FY2015: 30m(Kameido laboratory) [Capital Expenditure] -Capital Expenditure: 161m (New HQ:83m, IT system: 40m, Buildings: 18m, Manufacturing equipment: 19m) -Depreciation: 360m 8

10 Financial Highlights <Balance Sheet> Major assets ( million %) Title Result Change Result Change % Cash on hand at banks 18, Notes and accounts receivable 4, Securities 1, Inventories 4, Current assets 29, Buildings and structures 2, Land 4, Investments and other assets 1, Fixed assets 9, Total assets 39, [Major changes from the previous fiscal year] Cash and cash equivalents down 380million -Cash flows from operating activities up 2,727million -Acquisition tangible and intangible down 225million fixed assets -Share buyback down 1,500million -Dividend payout down 1,711million Fixed assets down 263million -Buildings and structures down 119million -Machinery and equipment down 103million Major liabilities and shareholders' equity ( million %) Title Result Change Result Change% Notes and accounts payable 1, Accrued income taxes 1, Current liabilities 4, Capital reserves 35,040 +1, Treasury stock 4,902-1, Net assets 34, Total liabilities and net assets 39, Net assets -Net profit -Capital reserves -Share buyback up 113million up 3,225million down 1,712million down 1,500million 9

11 Segments by item Healthcare wear Patient wear Shoes Doctors' wear Utility wear Surgery wear 10

12 Sales by Item Doctors' 16.1% Utility 4.1% Patient 9.0% Surgery 9.7% Healthcare Shoes 1.3% 58.4% Others 1.4% Year-on-year change FY2014 FY2015 Overall +3.8% -0.4% Healthcare wear +4.4% -0.1% Doctors' wear +4.2% -2.6% Utility wear -6.6% -9.8% Patient wear +6.3% +7.2% Surgery wear +3.2% +2.3% Shoes -5.1% -10.9% Others +9.0% -7.0% [Healthcare wear] -In 4Q, high functional products caught renewal contracts which were postponed and sales kept the previous year. [Doctors' wear] -As sales grew steadily for several years, the demand seemed to be calming-down. [Utility wear] - Sales fell because institutions changed unit of supply from individual to section and tighten the allocation standard. [Patient wear] -As expanding of sales in standard products and contributing of new products, high-growth sales continued. [Surgery wear] -As penetrating of surgical underwear(scrub) and COMPELPACK into the market, the highest ever sales continued 11

13 Sales by Region Central Japan 11.0% East Japan 51.7% West Japan 36.2% Overseas 1.1% [East Japan] - Sales declined. In 4Q, catching renewal contracts which were postponed and focusing on promotion, however, postponed contracts occurred. [Central Japan] -Market size was not large and there was the influence by the size of contracts. In this term, focusing on promotion, sales grew further. [West Japan] -The amount of sales kept previous year. Catching new contracts smoothly, sales of healthcare wear increased steadily. However, sales of utility wear decreased. Year-on-year change FY2014 FY2015 Total sales +3.8% -0.4% East Japan +0.8% -1.2% Central Japan +9.7% +1.7% West Japan +6.0% +0.0% Overseas +24.3% +5.4% [Overseas] -Though sales was not large, our reputation expanded and firm-growth sales continued. 12

14 III Market Environment 13

15 Market Environment Topics Medical treatment fees will be revised.(effective Apr. 2016) - The previous revise rate +0.10% (Consumption tax raise+1.36%, Treatment fees -1.26%) - Revise rate is not obvious. Escalating material prices, rising sewing costs -The price of cloth and material increased. -The cost of labor charge around China and Southeast Asia raised. Effect to the cost of overseas production due to appreciation of the dollar against the yen monthly average exchange rate in NY market(as of Aug.) 2010: 85/dollar, 2011: 77/dollar, 2012: 77/dollar, 2013: 98/dollar, 2014: 102/dollar, 2015: 123/dollar

16 Market Environment '06 '07 '08 '09 '10 '11 '12 Changes and prospects for medical and care service systems Medical System Medical Service Law, Health and Medical Medical treatment fees Service Law for the Aged, Medical Insurance, etc Proposed draft of reform of medical insurance system submitted. Expansion of DPC to general hospitals. New Health Frontier Strategy announced Social medical corporations instituted by law Medical program for very elderly instituted by law Metabolic diagnosis and health guidance specified as mandatory Enforcement of Amended Pharmaceutical Affairs Law Local healthcare revival plan Release of the 7th prospect for supply and demand of nursing staff. Legal transformation of national medical highly-advanced center into independent administrative corporations Postponed time limit of abolishing nursing care type medical facilities for 6 year. The interim appraisal of the medical expenses adjustment plan. Postponed abolishing of Medical Care System for People Aged 75 and over Total market: -3.16% Service: -1.3% Drug price: -1.8% Total market: -0.83% Service: +0.38% Drug price: -1.2% Total market: +0.19% Service: +1.55% Drug price: -1.36% Total market: % Service: +1.38% Drug price: -1.38% Care Service System Care Service Law, Nursing Care Insurance, etc. Enforcement of Amended Nursing Care Insurance Law 3 rd plan of care insurance system ( ) Ban lifted on medical corporations from operating private commercial nursing homes. Nursing care type medical facilities to be abolished in 2012 Nursing care type elderly health facilities instituted 4 th plan of care insurance system ( ) Disapproval of setting up specialty nursing homes for social medical organization. Enforcement of Amended Nursing Care Insurance Law 5th plan of care insurance system ( ) Nursing care fees Total market: -2.4% Home: -1.0% Facilities: -4.0% Total market: +3.0% Home: +1.7% Facilities: +1.3% Total market: +1.2% Home: +1.0% Facilities: +0.2% 13 2nd plan of the medical expenses Plan of strategic market creation Revising of measures against reduction of incidence for nursing care 14 Medical Service Act Enforcement of Amended Pharmaceutical Affairs Law Total market: +0.10% Service: +0.73% Drug price: -0.63% The law for Medical care synthesis total promotion +0.63% Consumption tax increase '15 System for promotion of community medical corporation Expansive financial support of national health insurance System for promotion of community medical corporation 6th plan of care insurance system ( ) Total market: +2.27% Home: 1.42% Facilities: -0.85% 16 Formulation of Local medical program Enforcement of Medical treatment with patients' offer will be revised (April, 2016) Enforcement of Amended Nursing Care Insurance Law for Community day care 15

17 Market Environment Revisions to medical treatment and care Service fees (%) 5 Medical 4 3 Care Service Consumption tax increase Consumption tax increase +1.63% Service -1.26% Home-1.42%, Facilities -0.85%

18 Market Environment Supply and Demand of Nursing Staff (Source: the Ministry of Health, Labor and Welfare (December 2010)) (10,000 persons) 175 Demand Forecast Actual Change to actual number as from the 7th Outlook. 150 Decreased number of nursing staff on both supply and demand sides for technical reasons due to the shift to a fulltime-worker-based counting system as from the 6th Outlook. actual number 125 The number of nursing staff on the supply side is estimated to increase by 2.57% annually. 100 The 5th outlook for nursing staff demand and supply ( ) The 7th outlook for nursing staff demand and supply ( ) 75 The 4th outlook for nursing staff demand and supply ( ) The 6th outlook for nursing staff demand and supply ( ) '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 The 7th outlook for nursing staff demand and supply (five-year plan from 2011 through 2015) Outlook for nursing staff supply and demand for all medical and nursing fields Next outlook for nursing staff supply and demand will be announced in 2015 (Year) 17

19 Market Environment (10,000 persons) 300 Supply and estimated future need for care workers 250 Forecast Actual '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '25 Since the number of track records are subject to the influence of change of an examination method, Ministry of Health, Labor and Welfare adjusted the number after Ministry of Health, Labor and Welfare: Estimation of care workers' demand toward 2025 (June. 2015) 18

20 Market Environment 300 (10,000 persons) Nursing Staff Supply and estimated future need care workers 250 forecast(maximum) forecast(minimum) Actual Actual record: Japanese Nursing Associations statistical data Forecast:The committee about supply and estimated future need of Nursing Staff(Dec. 2014) Ministry of Health, Labor and Welfare Ministry of Health, Labor and Welfare: Estimation of care workers' demand toward 2025 (June. 2015) 19

21 IV Forecast for FY

22 Management Tasks and Status Marketing strategy to boost sales Production strategy to ensure a steady supply Strategy for decrease production cost Capture clusters of needs in the healthcare wear market Increase peripheral business in products for patients and surgery Develop new markets Strengthen ties with material makers and trade firms Develop new production overseas base Optimize overseas production ratio to reduce country risk Strengthen ability to respond small-lot multi-product Shift to overseas from domestic production Develop new overseas' materials for standard products Start of long term exchange contract Apply special tax measures for EPA and FTA 21

23 Forecast Statements of Income (millions of yen,%) FY2016E % Change (FY2015) Composition % Change Net sales 16, Gross profit 7, Sales, general, and administrative expenses 2, Operating income 4, Recurring income 4, Net income 3, [Overview] - Net sales is expected highest record. This will be achieved by putting higher quality and value-added products in healthcare wear and doctor wear, catching renewal orders steadily, gaining new contracts and expanding sales in patient/surgery wear. [Gross profit] y/y + 57m(Factor of increase of Net sales + 161m, Factor of change of profit ratio m) Gross profit to sales FY % FY2016E 46.0% Boost of material cost and sewing cost (- 25m) Foreign Exchange rate: FY yen/dollar FY2016E 102.5yen/dollar (- 156m) Overseas production ratio FY % FY2016E 47.1 % (+ 63m) [Sales, general, and administrative expenses] - The cost of 100 th anniversaries: 34m [Non-operating income] - FY2015 Exchange-rate profit: 226m (Assets in foreign currencies:$3.3m at end of FY2015) [Extraordinary Profit and loss] -FY2015: Gain on sale of properties 30m(Kameido laboratory) [Other] -Tax reform in 2015, lower the corporate tax rate. FY2015: 36.94% FY2016E: 33.54% [Capital Expenditure] -Capital Expenditure: 175m (IT system: 45m, Buildings: 71m, Manufacturing equipment: 37m) -Depreciation: 338m 22

24 Forecast of Sales by Item ( million) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Sales by Item Shoes/Others Surgery wear Patient wear Utility wear Doctors' wear Healthcare wear Year-on-year change FY2015 FY2016E Sales -0.4% +2.2% Healthcare wear -0.1% +2.2% Doctors' wear -2.6% +2.5% Utility wear -9.8% -7.5% Patient wear +7.2% +4.7% Surgery wear +2.3% +4.4% Shoes/Others -10.9% -5.3% E [Healthcare wear] Activating market by higher quality and value-added products, sales of healthcare wear is expected to increase steadily. [Utility wear]as the demand being down, the decline in sales of utility wear is expected to continue. [Patient wear] The increase in sales of patient wear is expected to continue with demand in the health check market. [Surgery wear] As COMPELPACK and surgical underwear(scrub) being steadily permeated, the increase in sales of surgery wear is expected to continue. 23

25 Forecast of Sales by Region ( million) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Sales by Region Overseas West Japan Central Japan East Japan Year-on-year change FY2015 FY2016E Total sales -0.4% +2.2% East Japan -1.2% +1.7% Central Japan +1.7% +1.4% West Japan +0.0% +2.7% Overseas +5.4% +13.6% E Each area are expected to increase of sales and continue of the highest ever sales. [East Japan] Catching renewal orders steadily with higher quality and value-added products, the sales in East Japan is expected to increase consistently. [Central and West Japan] As gaining share by sales promotion, the increase of sales is planned, [Overseas] Sales is expected to increase as the impact of depreciation yen and expanding our reputation. 24

26 Product Strategy Sales by Product ( million) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2, E DC brand products High Functional products Standard Functional products Mass products Year-on-year change FY2015 FY2016E Sales -0.4% +2.2% DC brand products -9.9% -5.5% High Functional products +3.8% +5.1% Standard Functional products DC brand products High Functional products Standard Functional products -3.2% +0.8% Mass products -5.6% -6.3% (Retail price) 10,000Yen 7,500Yen 5,000Yen Mass products Price composition (Nurse one-piece) [DC brands ] Though existing DC brand products are on the decrease, New brand "Miffy" will contribute to the sale. [High functional products ] As these products being received well from the market, the increase in sales of high functional products is expected to continue by driving the strategy of higher quality and value-added products. [Mass products] As being on downward trend, the shift from mass products, include other company products, to functional products is expected to continue. 25

27 Production Strategy Production(Non-Consolidated) ( million) (%) 10, Composition FY2015 FY2016E 7,500 5, Purchased products Overseas production Domestic production Domestic production Overseas production Purchased products , Ratio of overseas production E 30 -To prepare for escalating of material prices and sewing costs, shifting to new factory in Java, Indonesia will finish until the end of

28 V Management Goals 27

29 Business Direction Sales Strategy -Increase peripheral business in products for patients and surgery. -Gain share In West Japan. -Develop and sale of high functional products. Profit Strategy -Driving the strategy of higher quality and value-added products. -The shift to overseas production. -The minimization of exchange risk Equalization of the fluctuations in foreign exchange rates by reservation of exchange contracts 28

30 Sales Strategy Sales by Item Sales by Region Sales by Products FY2012 (3 terms ago) Healthcare Doctors' 58% 16% Utility 6% East Japan 53% functional 43% 8% Patient 9% Surgery 3% Others Central Japan 10% 7% 36% 1% Overseas Standard functional 43% 7% FY2015 (Previous term) 58% 16% 52% 50% 11% 5% 3% 1% 6% 4% 9% 10% 36% 39% FY2018E (3 terms later) net sales 15,175 million 16,150 million 17,500 million High DC brand West Japan Mass 57% 16% 48% High functional 55% 2% Patient 11% Surgery 2% 12% 11% 4% 2% 4% West Japan 39% 37% 29

31 Net Sales and Gross Profit to Sales Ratio ( million) (%) 17,500 15,000 12,500 Net sales (left) Gross profit to sales (right) 55 10, ,500 5, , E17E18E (FY) Note: Consolidated data since FY1994 are shown. Preceding years represent non-consolidated data. ( million) FY2018E Net Sales 17,500 Operating Income 5,300 30

32 ⅤI Rewarding shareholder-focused policies 31

33 Profit Reimbursement to Shareholders Shareholder-focused policies - Improvement of transparency by proactive disclosure - Interactive communication with investors - Profit reimbursement by high dividends Dividend policy - Basic policy is to continue stable dividend payment with payout ratio of 50% -DPS will be 100 as 100th anniversaries Share buyback - Acquire expeditiously when our share is undervalued - Share purchased in January FY million shares, 1,500 million yen 32

34 The History of Stock Value BPS (yen) EPS (yen) DPS (yen) 1,100 (Yen) ( 円 ) 100 FY FY ,000 FY FY FY FY FY FY FY FY FY FY FY FY2014 1, FY2015 1, FY2009: Accrued pension fund withdrawal payment loss 1.04b A dotted line is when there was not outbreak. Book Value Per Share (BPS)(left) Earnings Per Share(EPS)(right) 33

35 Actual Dividends Paid Total dividend Share buyback Payout ratio Total return ratio (Million yen) (Million yen) (non-c, %) (non-c, %) FY FY FY , FY FY2005 1, FY2006 1, FY2007 1, FY2008 1,083 1, FY2009 1,040 1, FY2010 1, FY2011 1, FY2012 1, FY2013 1, FY2014 1, E54.4 FY2015E *E3,324 1,500 E107.5 E153.8 *2015: DPS 100yen (commemorative 50yen) 34

36 Management Philosophy We will provide medical products and services of the highest quality, as the leading company to link "medical services" and "clothing." - Consistently challenging spirit to lead the industry - Achievement of contribution to society - "Respect for Harmony among People" people are our asset 35

37 Notes on this material This material includes forecasts for the future. These forecasts are based on the judgment of the Company's management concerning currently available information. These future projections include assumptions or views based on assumptions, and therefore may be different from the actual outcome, depending upon future circumstances. The expectations for future results stated by the Company or its management in this material do not represent any warranty that these expectations or particular results will be realized. The Company is not liable to update any of its forecasts, or projections, unless otherwise provided for by law or under the relevant regulations. 36

38 Data File FY2015 (Listed on the 1st Section of the Tokyo Stock Exchange;Code 7447) <Contact for information on this material: Mr. Ohno, Administration Headquarters ( )>

39 Index 1 Sales by Item 2 Sales by Product 3 Sales by Region 4 Rationalization of the Production System and Our Purchasing Strategy (Non-Consolidated) 5 Statements of Income (Consolidated) 6 Statements of Income (Non-Consolidated) 7 Indices (Consolidated) 8 Indices (Non-Consolidated) 9 10 Statements of Income (Consolidated Non-Consolidated) Balance Sheet (Consolidated Non-Consolidated)

40 1. Sales by Item FY 12/8 13/8 14/8 15/8 16/8E First-half 14/8 ( million) First-half 15/8 Sales 15,175 15,625 16,214 16,150 16,500 6,775 6,840 Healthcare wear 8,769 9,039 9,440 9,429 9,640 3,914 4,011 Doctors' wear 2,483 2,566 2,674 2,604 2,670 1,064 1,046 Utility wear Patient wear 1,223 1,273 1,353 1,451 1, Surgery wear 1,374 1,479 1,525 1,560 1, Shoes Others ( million) 18,000 16,000 14,000 12,000 Change over previous year (%) Sales Healthcare wear Doctors' wear Utility wear Patient wear Surgery wear Shoes Others Composition (%) Sales Healthcare wear Doctors' wear Utility wear Patient wear Surgery wear Shoes Others ,000 8,000 6,000 4,000 2, /8 13/8 14/8 15/8 16/8E Others Shoes (FY) Surgery wear Patient wear Utility wear Doctors' wear Healthcare wear 1

41 2. Sales by Product FY 12/8 13/8 14/8 15/8 16/8E First-half 14/8 ( million) First-half 15/8 Sales 15,175 15,625 16,214 16,150 16,500 6,775 6,840 DC brand products 1, High Functional products 6,547 7,212 7,795 8,090 8,500 3,267 3,457 Standard Functional products 6,501 6,433 6,462 6,252 6,300 2,712 2,617 Mass products 1,100 1,045 1, Change over previous year (%) Sales DC brand products High Functional products Standard Functional products Mass products ( million) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 Composition (%) Sales DC brand products High Functional products Standard Functional products Mass products DC brand High Functional Standard Functional products Mass products (Retail price) 10,000Yen 7,500Yen 5,000Yen Price composition (Nurse one-piece) 4,000 2, /8 13/8 14/8 15/8 16/8E(FY) DC brand products High Functional products Standard Functional products Mass products 2

42 3. Sales by Region FY 12/8 13/8 14/8 15/8 16/8E First-half 14/8 ( million) First-half 15/8 Sales 15,175 15,625 16,214 16,150 16,500 6,775 6,840 East Japan 8,106 8,390 8,461 8,357 8,500 3,422 3,430 Central Japan 1,564 1,591 1,745 1,774 1, West Japan 5,386 5,508 5,839 5,842 6,000 2,503 2,529 Overseas ( million) 18,000 16,000 14,000 12,000 10,000 Change over previous year (%) Sales East Japan Central Japan West Japan Overseas ,000 6,000 4,000 2,000 Composition (%) Sales East Japan Central Japan West Japan Overseas /8 13/8 14/8 15/8 16/8E (FY) Overseas West Japan Central Japan East Japan 3

43 4. Rationalization of the Production System and Our Purchasing Strategy(Non-Consolidated) FY 12/8 13/8 14/8 15/8 16/8E First-half 14/8 ( million) First-half 15/8 Domestic production 5,056 4,951 5,061 4,901 4,813 2,454 2,495 Overseas production 3,441 3,550 4,017 4,215 4,401 1,880 2,112 Purchased products Total 8,737 8,725 9,320 9,252 9,344 4,405 4,673 ( million) 10,000 7,500 (%) , Change over previous year (%) Domestic production Overseas production Purchased products , Total Composition (%) Domestic production /8 13/8 14/8 15/8 16/8E 30 (FY) Overseas production Purchased products Purchased products Total Overseas production Domestic production % of purchases from overseas factories 4

44 5. Statements of Income (Consolidated) FY 12/8 13/8 14/8 15/8 16/8E First-half 14/8 ( million) First-half 15/8 Net Sales 15,175 15,625 16,214 16,150 16,500 6,775 6,840 Gross profit 7,103 7,346 7,585 7,532 7,590 3,169 3,187 Sales, general, and administrative expense 2,461 2,473 2,662 2,719 2,776 1,337 1,390 Operating income 4,642 4,873 4,923 4,813 4,814 1,831 1,797 Recurring income 4,787 5,418 5,142 5,088 4,869 1,925 2,033 Net income 2,371 3,119 3,224 3,225 3,237 1,264 1,302 Change over previous year (%) Net Sales Gross profit Sales, general, and administrative expense Operating income Recurring income Net income Composition (%) Net Sales Gross profit Sales, general, and administrative expense Operating income Recurring income Net income

45 6. Statements of Income (Non-Consolidated) FY 12/8 13/8 14/8 15/8 16/8E First-half 14/8 ( million) First-half 15/8 Net Sales 15,166 15,616 16,199 16,141 16,500 6,767 6,831 Gross profit 6,794 7,031 7,270 7,218 7,270 3,032 3,053 Sales, general, and administrative expenses 2,493 2,482 2,662 2,718 2,773 1,330 1,383 Operating income 4,301 4,549 4,608 4,500 4,497 1,701 1,669 Recurring income 4,458 5,177 4,938 4,883 4,657 1,902 2,005 Net income 2,189 3,014 3,145 3,137 3,132 1,290 1,318 Change over previous year (%) (%) Net Sales Gross profit Sales, general, and administrative expenses Operating income Recurring income Net income Composition (%) (%) Net Sales Gross profit Sales, general, and administrative expenses Operating income Recurring income Net income

46 7. Indices (Consolidated) (Unit) 11/8 12/8 13/8 14/8 15/8 First-half 14/8 Profitability ROE (%) ROA (%) Return on sales Net income (%) ROE resolution Total Assets Turnover (Times) Leverage (Times) Current Ratio (%) Fixed Assets Ratio (%) First-half 15/8 Financial stability Fixed Assets Ratio to Total of Shareholders Equity and Long-term Liabilities (%) Account Receivable Turnover (Times) Inventory Turnover (Times) BPS ( ) 1, , , Per share data EPS ( ) DPS ( ) Payout ratio (%) Free issue Stock split 2011/9/1 2-for Adjusted Adjusted BPS ( ) Per share data Adjusted EPS ( ) Adjusted DPS ( ) Capital expenditure ( million) 2, Others Depreciation ( million) Number of employees (Persons) Personnel expense ( million) 2,190 2,235 2,245 2,305 2,305 1,149 1,158 (Note1) Ratio of Fixed Assets to Total of Shareholders Equity and Long-term Liabilities = Fixed Assets (Total shareholders equity + Long-term Liabilities) (Note2) Each of the balance sheet items used in the turnover figures is the average of the balances at the beginning and the end of the financial year. 7

47 8. Indices (Non-Consolidated) (Unit) 11/8 12/8 13/8 14/8 15/8 Profitability ROE (%) First-half 14/8 ROA (%) Return on sales Net income (%) ROE resolution Total AssetsTurnover (Times) Financial stability Leverage (Times) Current Ratio (%) Fixed Assets Ratio (%) Fixed Assets Ratio to Total of Shareholders Equity and Long-term Liabilities (%) Account Receivable Turnover (Times) Inventory Turnover (Times) First-half 15/8 BPS ( ) 1, Per share data EPS ( ) DPS ( ) Payout ratio (%) Free issue Stock split 2011/9/1 2-for Adjusted Adjusted BPS ( ) Per share data Adjusted EPS ( ) Adjusted DPS ( ) Capital expenditure ( million) 2, Others Depreciation ( million) Number of employees (Persons) Personnel expense ( million) ,007 1,051 1, (Note1) Ratio of Fixed Assets to Total of Shareholders Equity and Long-term Liabilities = Fixed Assets (Total shareholders equity + Long-term Liabilities) (Note2) Each of the balance sheet items used in the turnover figures is the average of the balances at the beginning and the end of the financial year. 8

48 9. Statements of Income (Consolidated) ( million,%) ( million,%) FY 14/8 14/8 Change(the previous year) First-half 14/8 First-half 15/8 Change(the previous year) Result Composition Result Composition Result Change % Result Composition Result Composition Result Change % Net Sales 16, , , , Cost of sales 8, , , , Gross profit 7, , , , Sales, general, and administrative expens 2, , , , Packing and freight expenses Advertising expenses Personnel expenses 1,225 1, Management commission expense Depreciation expenses Operating income 4, , , , Non-operating income Interest income Rent income Others Non-operating expense Fixed assets rent expense Others Recurring income 5, , , , Extraordinary profit Extraordinary loss Income before income taxes 5, , , , Income, inhabitant and enterprise taxes 1,902 1, Tax adjustments Net income 3, , , ,

49 10. Statements of Income (Non-Consolidated) ( million,%) ( million,%) FY 14/8 15/8 Change(the previous year) First-half 14/8 First-half 15/8 Change(the previous year) Result Composition Result Composition Result Change % Result Composition Result Composition Result Change % Net Sales 16, , , , Cost of sales 8, , , , Gross profit 7, , , , Sales, general, and administrative expenses 2, , , , Packing and freight expenses Advertising expenses Personnel expenses 1,051 1, Management commission expenses Depreciation expenses Operating income 4, , , , Non-operating income Interest income Dividend income Rent income Others Non-operating expense Fixed assets rent expense Others Recurring income 4, , , , Extraordinary profit Extraordinary loss Income before income taxes 5, , , , Income, inhabitant and enterprise taxes 1,763 1, Tax adjustments Net income 3, , , ,

50 11. Balance Sheet (Consolidated) ( million,%) ( million,%) FY 14/8 15/8 Change(the previous year) First-half 14/8 First-half 15/8 Change(the previous year) Result Composition Result Composition Result Change % Result Composition Result Composition Result Change % Current assets 29, , , , , Cash on hand and at banks 19,054 18,673 16,016 15,510 Trade notes and accounts receivable 4,696 4,689 4,106 4,710 Securities 1,516 1, ,517 Inventories 3,835 4,199 4,330 4,860 Others Reserve bad debt Fixed assets 9, , , , , Tangible fixed assets 7, , , , Buildings and structures 2,570 2,450 2,647 2,502 Machinery and equipment Land 4,480 4,447 4,480 4,480 Construction in progress Others Intangible fixed asset Investments and other assets 1, , , , , Investment securities , Others 1, ,132 1,187 Reserve bad debt Total assets 39, , , , Current liabilities 3, , , , Trade notes and accounts payable 1,517 1,399 1,570 1,658 Accrued income taxes 1,333 1, Accrued bonus Others Long-term liabilities Accrued pension and severance costs Directors retirement allowances Others Total liabilities 4, , , , Total shareholders equity 34, , , , Capital stock 1,925 1,925 1,925 1,925 Capital reserves 2,358 2,358 2,358 2,358 Retained earnings 33,569 35,040 31,609 33,117 Treasury stock -3,402-4,902-3,401-4,902 Accumulated other comprehensive income Net unrealized gains on investment securitie Deferred hedging gains and losses Accumulated pension and severance costs Total net assets 34, , , , Total liabilities and total net assets 39, , , ,

51 12. Balance Sheet(Non-Consolidated) ( million,%) ( million,%) FY 14/8 15/8 Change(the previous year) First-half 14/8 First-half 15/8 Change(the previous year) Result Composition Result Composition Result Change % Result Composition Result Composition Result Change % Current assets 26, , , , , Cash on hand and at banks 16,888 16,456 14,085 13,550 Trade notes 2,984 2,713 1,836 1,928 Accounts receivable 1,710 1,975 2,268 2,781 Securities 1,516 1, ,517 Inventories 3,122 3,370 3,449 3,978 Others Reserve bad debt Fixed assets 9, , , , , Tangible fixed assets 7, , , , Buildings and structures 2,522 2,405 2,596 2,452 Machinery and equipment Land 4,480 4,447 4,480 4,480 Construction in progress Others Intangible fixed asset Investments and other assets 1, , , , , Investment securities , Others , Reserve bad debt Total assets 35, , , , Current liabilities 3, , , , Trade notes ,014 Accounts payable Accrued income taxes 1,251 1, Others Long-term liabilities Accrued pension and severance costs Directors retirement allowances Others Total liabilities 3, , , , Total shareholders equity 31, , , , Capital stock 1,925 1,925 1,925 1,925 Capital reserves 2,637 2,637 2,637 2,637 Retained earnings 30,564 31,993 28,709 30,174 Treasury stock -3,402-4,902-3,401-4,902 Valuation and translation adjustments Net unrealized gains on investment securities Deferred hedging gains and losses Total net assets 31, , , , Total liabilities and total net assets 35, , , ,