Nittobo Group Mid-Term Business Plan
《Go for Next 100》 Challenges for the
Change and Creation (2017-2020)
Nittobo
Director, Representative and CEO
Yuichi Tsuji February 7th 2017
Figures described in this presentation are based on information of which the
company is currently in possession and certain assumptions that are considered to
be reasonable, and the Company does not guarantee their achievement.
（Content of presentation）
1.
2.
3.
Summary of Current Mid-Term Business
Plan (2014-2016)
Nittobo Declaration and Basic
Philosophy
Mid- to Long-Term Business Plan
Long-Term Vision
Mid-Term Business Plan (2017-2020)
Action Plan
Key Performance Indicators
4.
Financial Strategy and Shareholder
Return Policy
2
1. Summary of Current Mid-Term Business Plan - 1
Sales and Ordinary Income
Period of Current Mid-Term Business Plan
(Hundreds of millions of yen)
1,000
Sales (Left axis)
900
800
120
Ordinary profit (Right axis)
842
826
821
851
902
500
862
850
60
55
64
835
Sales Target
700
600
100
65
87
110
110
80
60
40
Ordinary Income
Target 60
20
0
400
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
(Forecast)
3
1. Summary of Current Mid-Term Business Plan - 2
Operational Income per Business Segment
(Hundreds of millions of yen)
140
Environment and
120
100
80
60
40
20
0
-20
20
18
22
11
33
27
26
Health
18
20
Glass fiber for
30
30
48
49
22
12
29
0
-1
-5
-4
FY2013
FY2014
FY2015
FY2016
Industrial Materials
Glass fiber cloth
Glass fiber yarn
Textiles
(Forecast)
4
1. Summary of Current Mid-Term Business Plan - 3
Net Interest-bearing Debt from FY2010 to 2016
(Hundreds of millions of yen)
350
300
250
266
Period of Current Mid-Term Business Plan
70.0%
297
Net interest-bearing debt
251
215
Equity ratio
183
200
150
100
50
42.4% 42.0%
44.8% 45.9%
65.0%
60.0%
55.6%
150
55.0%
49.6% 52.3%
50.0%
100
45.0%
40.0%
0
35.0%
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
(Forecast)
5
1. Summary of Current Mid-Term Business Plan - 4
Reduction of Inventories and Improvement of Capital Efficiency
Inventory 12 billion yen （As of end FY2011）→8 billion yen（As of end of FY2016,
expected）
Selection and Concentration
Reinforce the control of subsidiary (NAG, Taiwanese glass fiber maker, 100% share in
May 2014)
Sale of unprofitable business security firm and clean firm in Jan. 2015, Sound
engineering in Apr. 2015 and Hospital in Mar. 2016
Business Continuity Plan
Private power generation system installed in Koriyama (Feb. 2015)
Seismic evaluation (Started in 2014 and completed in 2016）
Corporate Governance
Transition to the Company with a Nomination Committee (Jun. 2014)
Increased outside directors from 2 to 3 to 4, 50% of 8 total directors. (Jun. 2015)
Capital Policy and Shareholder Return
Dividend increased from 5 to 6 yen per share including interim dividend from 2016
Buy back and retirement (6 million) as well as retirement (48 million) of issued shares
starting in Nov. 2016
6
２． Nittobo Declaration and Basic Philosophy
『Basic philosophy for business operation』
Nittobo group continues to contribute to the realization of healthy and comfortable lives by the variety
of innovative and leading technologies.
『 Nittobo Declaration 』
We, Nittobo, hereby declare our basic philosophy for business operations.
Nittobo aspires to be the best social partner.
Nittobo always pursues customer needs, delights in the delivery of relief to customers and values
the contribution it makes to all stakeholders including shareholders, investors, government and
local communities.
Nittobo respects the personality, potential and flexibility of each member of its personnel, and
teamwork to perform as one Nittobo Group.
Nittobo believes the growth of its employees contributes to the growth of the company and
provides the opportunity for growth and self-esteem to tis employees. All employees should be
closely involved in their communities, while being deeply considerate, broad minded, decisive in
action. We will be faithful and patient to achieve the goal.
Main pillars for the
business operation
(From FY2016)
1. Open communication to all stakeholders
2. Sustainable growth based on solid technology
3. Corporate governance system
7
3. Mid- to Long-Term Business Plan – VISION101
Nittobo survives in our home country’s market in spite of the total
demand attenuation and decreasing birthrate, and aging population.
And we are expanding the oversea business for sustainable growth
over the NEXT 100 years.
- Target as at FY2023, 101th year from establishment of company Nittobo delivers the unique products and innovations globally from Fukushima
in Japan based on customer relations and technology.
Textile
Acceleration of high value added strategy and expansion of the application of textile technology to
industrial fields with proper business volume and profitability.
Glass fiber
Stable provision of high value added products in the rapidly changing environment to consolidate our
presence as market leader.
Environment and health
Growth as 2nd pillar of Nittobo group by leveraging the competence in diagnostics, specialty chemical,
and beverage fields.
8
3. Key Performance Indicators in VISION101
(Hundreds of millions of yen)
Sales
Operational income
Ordinary income
Net income
ROE (%)
Net interest-bearing debt
Equity ratio
R&I rating
FY2016
835
110
110
70
9.2%
100
55.6%
FY2023
1,500
150
150
100
10%+
0
70%
BBB+
A
9
3. New Mid-Term Business Plan (2017-2020)
Planning Direction
The mid-term business plan 2017-2020 stands for the 1st stage of the VISION 101,
targeting the end of FY2023.
Grasp business opportunities for future growth based on the current profitable
business.
Reinforce the group’s competence deeply during this mid-term business plan period.
Theme of the new mid-term business plan
“Go for next 100” Challenges for change and creation
10
3. Key performance indicator of “Go For Next 100”
(hundreds of millions of yen)
FY2016
FY2020
Sales
835
1,000
Operational income
110
120
Ordinary income
110
120
70
80
ROE(%)
9.2%
≥8%
Net interest-bearing debt
100
≤100
55.6%
≥60%
EBITDA
150
200
R&D cost ratio per sales
1.5%
≥2.0%
172
550
Net income
Equity ratio
4 years comulative capital
investment
Foreign exchange ratio
108 JPY/USD
100 JPY/USD
11
Product Lineup of Nittobo
12
Macro Trends of Market and Society
-
Environmental problems including global warming
Decreasing birthrate and an aging population, increasing cost of social security
Acceleration of Smart technology (Automobiles, house, appliance, clothes)
Expansion of IoT, big data, Cloud networking and information networks
-
Weight reduction of automobile and
airplane
Thermal efficient house
Increase of network traffic
Increase the capacity and speed of
communication
Automatic operation of the car
-
-
Preventive medicine
Personalized medicine
Immunology, Cancer, Allergy
-
Multi-functionalization of materials
for clothes (Conductive, Deodorize,
Stretching, Warmth-keeping)
Nittobo Competence
[Glass Fiber Division]
Consistent manufacturing capacity from material (Glass fiber yarn, etc.)to finished product
(Glass fiber cloth etc.) / Large product lineup
[Environment and Health]
Consistent manufacturing capacity from material to finished product / Competent R&D
[Textiles]
R&D capability to launch the multi-functional and multi-structured yarn
13
3. Action Plan during 2017-2020
Market in R&D
10-year planned research
1.
Establishment of general R&D
laboratory
R&D
Accelerating the shift to
high value added products
1.
Sales expansion of NE glass,
T glass and multi-structured fibers
2.
Application to various industrial field and
share expansion of oversea market
3.
Acquisition of domestic top share in
immunology field and expansion of
oversea business
4.
Strategic alliance and M&A
Corporate social responsibility
1.
2.
Reduction of environmental impact
Community involvement
Produ
ction
Reinforce the production capacity
for high value added product
1. NE Glass / T Glass
2. High value added glass fiber cloth
3. Reagent for in vitro diagnostics
4. Textile technology application to
industrial fields
Cost competitiveness and
productivity
1. Leverage the artificial intelligence
and the Internet of Things
technology
Sales
Soundness of business foundation
Capital efficiency
Leveraging idle real estate
Compression of marketable securities
2. HR education / Skill inheritance
3. Corporate Governance
1.
14
3. Sales and Income Targets during the Period of VISION 101
(Hundreds of millions of yen)
160
1,600
Ordinary income target (Left axis)
1,400
140
Sales target (Right axis)
1,200
120
Further
growth
1,000
100
800
80
4 years
investment for
future growth
600
400
FY2013
FY2014
FY2015
FY2016
FY2020
60
FY2023
40
(Forecast)
55 billion yen will be invested for potential opportunities, by the
secured source from operating cash flow and utilization of assets.
15
Waterfall Chart of Ordinary Income (FY2016-2020)
(Hundreds of millions of yen)
6
13
110
FY2016
65
120
36
Yen appreciation Fuel Expensive
Depreciation
Expansion of
expense
high value added
increase
FY2020
product sales
Productivity improvement
FY2016
FY2020
FY2020
Foreign Exchange
(JPY/USD)
108.72
100.0
Dubai Oil Price
(USD/Barrel)
46.37
60.0
GAP
8.72
Yen appreciation
13.27
Increase
16
3. Net Interest-bearing Debt Target during the Period of
VISION 101
70%
300
70.0%
Net interest-bearing debt (Right axis)
250
65.0%
Equity ratio (%)
60.0%
200
55.6%
150
100
50
0
60.0%
49.6%
55.0%
52.3%
50.0%
45.9%
45.0%
Virtually
Zero
Financial soundness
40.0%
FY2013
FY2014
FY2015
FY2016
FY2020
FY2023
(Forecast)
55 billion yen will be invested together with current healthy
financial soundness
17
4. Financial Strategy and Shareholder Return Policy
Financial Strategy
-
Investment for future opportunities, secured from operating cash flow and
asset utilization
-
Balance between the deduction of net interest-bearing debt and
shareholder return
Source
Operating
cash flow
Utilization of asset
Shareholder return policy
500
-
Purpose
Capital
Investment
Shareholder return
Reducing the interestbearing debt etc.
300
Based on stable increment, the amount of dividend should be decided
corresponding to the payout ratio as well as the business results
250
Premium shareholder return
150 to be decided as per the financial condition
18
Chronological Chart of Sales, Ordinary Income and Net Income
(Hundreds of millions of yen)
* The maximum consolidated sales was 194.4 billion yen in 1990
19
Domestic Allocation Map
Textile
Environment and Health
Glass fibers
Headquarter and branches
Nittobo Group Companies (Total 33)
(Textiles)
- Nittobo Interlining
- Nittobo Niigata
(Glass fibers)
- Paramount Glass Manufacturing
- Nitto Glass Fiber Manufacturing
- Fuji Fiber Glass
(Environment and Health)
- Nittobo Medical
- Nitto Beverage
Other 26 companies.
Fukushima Area
Fukushima 1st Factory
Itami Production center
Nittobo Niigata
Nitto Beverage
Fukushima 2nd Factory
Fiber R&D Center
Fukuyama Area
Nitto Glass Fiber
Nittobo Medical
Tokyo
Osaka
Nagoya
Chiba Business Center
General R&D (Ten.)
Nitto Glass Tech
Fuji Fiber Glass
20
Oversea Allocation Map
Textiles
Glass fibers
Environment and Health
21