ALCONIX FY2016 4Q kikan part2 E 170601 revised(web)mw2pemthym.bizmw.com/wordpress/wp-content/uploads/2017/... · 2017. 9. 4. · Three main characteristics of the ALCONIX Group Business

ALCONIX CORPORATION (Listed on TSE First Section, Code 3036)

Company Overview / Appendix

May 2017

Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 2

About ALCONIX


Business Summary


Business range Business summary

ALCONIX is a trading company group with comprehensive operations that encompass everything from the distribution and sale of non‐ferrous metals to the manufacture of metal products.

1.65‐6%


Three main characteristics of the ALCONIX Group Business summary

UniqueBusiness mix

Trading

Manufacturing

Electronic and advanced materials

Aluminum and copper products

Business expansion through M&A and business investments

15 M&As

30 business investments

11 overseas sites, 16 locations

Firm, close tie‐up overseas network

Metal processing

Equipment and materials


Trading/Electronic and advanced materials, Aluminum and copper products Business summary

Businesses Our trading products End products Main business areas

Electronic and advanced materialsJapan, North America, Europe, China, Asia

Consolidated subsidiaries

ADVANCED MATERIAL JAPAN CORPORATION,etc.

Aluminum and copper products Main business areas

Japan, China, Asia, Europe, Latin America


ALCONIX SANSHINHAYASHI METALALCONIX•MITAKAHEIWA KINZOKU

Titanium coils Compound semiconductors and other electronic

materials

Automobiles (magnetic and

battery materials for various motors)

Tablet PCs, smartphones

(battery materials, etc.)

Titanium products (heat exchangers)

Titanium sponge Rare earth strips

Rare earth ingots Rare earth compounds

Aluminum alloy ingots

Metal scraps

Aluminum coils Copper productsAircrafts

(used in structural parts )

Automobiles (bodies)

Motorcycles (aluminum frames,

etc.)

Air conditioners (copper tubes)

Lead frames(for semiconductor) Aluminum cansBrass copper rod

Wind power generation (turbines)

Window materials(coating agents)

LCD panels

Segment weighting(sales)

Segment weighting(profits)

28.0%

26.7%



59.3%

20.4%

(As of March 31, 2017)


Manufacturing/Metal processing, Equipment and materials Business summary

Businesses Our trading products End products Main business areas

Equipment and materials

Japan, China, Asia


OHKAWA CORP.OHBA SEIKEN CO., LTD.

Metal processingMain business

areas

Japan, China, North America, Europe, Asia


UNIVERETICALTOKAI YOGYOMARKTEC

Precision fabricated parts Artificial satellite (communication

parts)

Precision grinding processing parts

Aircrafts(engine parts)

Chip mounters

Tablet PCs, smartphones

(PWBs)

Plating materials

Welding rods

Non‐destructive testing (equipment)

Non‐destructive testing (detection materials)

Vehicle (plating, metal mold

building‐up welding rods, non‐destructive testing)

Steel (marking)

Semiconductor (PWB plating)

Construction materials(plating)

Automobiles (driving parts, trial parts)

Power generation plant(non‐destructive

testing)



8.2%

4.9%



4.5%

48.2%



Business summary

■M&A (acquisition of stock) ■M&A (acquisition of business)

■ Business investment (equity‐method affiliates)TOKAI YOGYO CO., LTD.HEIWA KINZOKU CO., LTD.

Inada Copper CenterK’MAC Co., Ltd.

OHBA SEIKEN CO., LTD. ALUMINUM & COPPER RECYCLING CENTER CORPORATION

UNIVERTICAL CORPORATION (UHI)Shanghai Longyang Precise Compound Copper Tube Co., Ltd.Hangji Chuangfu (Foshan) Metal Product Co., Ltd.

ALCONIX・MITAKA CORP.

OHKAWA CORP.HAYASHI METAL CORP.

Goko Shizai Co., Ltd. (ALCONIX SANSHIN CORPORATION)

Non‐ferrous materials business (Sojitz Metals Co., Ltd.)

Listed on JASDAQ

Listed on Tokyo Stock ExchangeSecond section

Listed on Tokyo Stock Exchange, First section

Established Nissho Iwai Non‐Ferrous Metals Corp. Changed company name to Nissho Iwai Alconix Corporation

Management buy‐out –beginning of our second stage of growth

Changed company name to ALCONIX CORPORATION

Overseas network expansion

Singapore AMJ

Taiwan

Relocated the head office

USA, China, Hong Kong and Thailand

Germany

Malaysia

Thailand ALCONIX LOGISTICS

Domestic sales of copper tubes(Sanshin Rinkei, now ALCONIX SANSHIN)AMJ (minor metal, rare earth)

FUJI PRESS

MARKTEC CORPORATION

Company’s Growth

Business Expansion

Expansion through M&As and business investments


Solid overseas network 事業概要

The ALCONIX Group has a unique overseas network that emphasized profitability

● Overseas subsidiaries and liaison offices

(As of March 2017)

Business summary

11 overseas sites, 16 locations

Dusseldorf Moscow

Cairo

Beijing

Shanghai Shenzhen

Guangzhou

Bangkok

Kuala Lumpur

Singapore

Taipei

Hong Kong

Hanoi

Chicago

Chicago, USA: ALCONIX USA., INC.Hong Kong, China: ALCONIX HONGKONG CORP., LTD.Bangkok, Thailand: ALCONIX (THAILAND) LTD.

ALCONIX LOGISTICS (THAILAND) LTD.Shanghai, China: ALCONIX (SHANGHAI) CORP.Beijing, China: ALCONIX (SHANGHAI) CORP., Beijing BranchShenzhen, China: ALCONIX (SHANGHAI) CORP., Shenzhen BranchGuangzhou, China: ALCONIX (SHANGHAI) CORP., Guangzhou BranchDusseldorf, Germany: ALCONIX EUROPE GMBHKuala Lumpur, Malaysia: ALCONIX (MALAYSIA) SDN. BHD.Taipei, Taiwan: ALCONIX (TAIWAN) CORPORATIONHanoi, Vietnam: ALCONIX VIETNAM CO.,LTD.

Moscow Liaison Office (Russia): ADVANCED MATERIAL JAPAN CORPORATIONADVANCED MATERIAL BEIJING CORPORATION (China): ADVANCED MATERIAL JAPAN CORPORATIONADVANCED MATERIAL TRADING PTE.LTD.(Singapore)

▲Overseas agents

Cairo, Egypt


Business Model


The integrated ALCONIX business model Business model

Operations that unify manufacturing and sales by using synergies from trading company and manufacturing capabilities

Changes in the external

environmentCustomers’ needs

Manufacturing and recycling(up‐stream activity)

Tradingcompany

(mid‐stream activity)

Wholesale(downstream

activity)

Logistics functions linking materials/non‐ferrous metal refiners with customers

Wholesale/retail functionsBusiness base: within Japan

Direct investment in manufacturersEstablish manufacturing company in joint venture

Business base:domestic/overseas

Business base:domestic/overseas/third‐party countries


Business fields Business model

Ore Ingots Products

Trading segment

Manufacturing segm

ent

Base metals

Minor m

etals

Mining

entities (overseas)

ADVANCED MATERIAL JAPAN CORPORATION (AMJ)

(Consolidated subsidiary)

Major trading firms

Smelting

entities (dom

estic/overseas)

Raw resource‐

trading firmsProduct‐trading

firms

Rolling, extrusion, reprocessing entities (dom

estic/overseas)

Metal processing

Equipment and m

aterials

Precision machining processing OHKAWA

Precision grinding processing

OHBA SEIKEN

Non‐destructive testing equipment and marking device manufacturing

MARKTEC

Plating material manufacturing UNIVERTICAL

Welding rods, thermal spraying TOKAI YOGYO

Electronic and advanced m

aterialsAlum

inum and

copper products

End productsEnd products

End user industriesAutomobiles Semiconductors

End user industriesAircrafts Semiconductors/IT

End productsEnd user industries

Automobiles

Consumer electronics

Semiconductors/IT

Aircrafts


Business model ‐Features of trading capabilities and profit structure Business model

○：プラス、△：マイナス、―：中⽴

Business style Business flow Inventory Profitability Profit sourceWhen market prices rise

Amount of profit Profit margin

IntermediaryALCONIX concludes each contract with clients or supplier individuallyALCONIX facilitates and control distribution

No inventory

No inventory riskProfitability tends to be relatively high

Margin/ commission ○ (Eager to purchase) ○

Direct

Contract conditions (price, delivery date, amount) are concluded between our client and supplierSupplier deliver directly to our client

No inventory

No inventory riskProfitability tends to be low

Commission (fixed amount)Commission (transaction price x fixed rate)Commission (processing costs x fixed rate)

○(Eager to purchase)○(Eager to purchase)○(Eager to purchase)

Slightly○‐

Slightly△

Inventory‐1 (Already contracted)

ALCONIX takes an order from specific client, holds inventory and delivers just in time

Hold inventory

No inventory riskProfitability tends to be average

Margin/ commission ○(Eager to purchase) ‐

Inventory‐2 (No sales contract)

ALCONIX controls, and holds inventory regardless of any clients order

Hold inventory

Existence of inventory riskProfitability tends to be high

Margin ○(Eager to purchase) ○

Market price rise expansion of client demand; Market price drop restraint in client demand Relatively small impact of market volatility on our transactions Some "Intermediary" and "Inventory‐2" transactions are directly impacted by the market. "Inventory‐2" transactions account for only 5% of total transactions. This limits the direct impact of market volatility

on our profits.

○: Positive △: Nega ve ―: Neutral


Corporate Data


Consolidated financial summary Corporate data

Listed on JASDAQ

Listed on TSE 2nd Section

Designated for listing on TSE 1st Section

FY3/06 FY3/07 FY3/08 FY3/09 FY3/10 FY3/11 FY3/12 FY3/13 FY3/14 FY3/15 FY3/16 FY3/17

Net sales 127,627 172,781 215,839 165,439 109,192 157,979 220,703 164,769 183,749 201,543 201,755 201,948

Cost of sales 122,968 166,668 208,571 159,582 103,259 149,710 210,060 156,010 172,754 189,452 189,574 187,472

Gross profit 4,659 6,112 7,268 5,857 5,932 8,268 10,642 8,759 10,995 12,091 12,181 14,476

SG&A expenses 3,175 3,631 4,195 4,212 4,395 5,191 5,955 5,473 7,510 7,506 8,388 10,307

Operating profit 1,483 2,480 3,072 1,645 1,537 3,077 4,687 3,286 3,484 4,584 3,792 4,168

Ordinary profit 1,214 1,910 2,452 1,577 1,402 2,963 4,499 2,892 3,600 5,205 4,281 4,352

Profit before income taxes 1,133 1,903 2,512 564 2,456 3,376 4,453 2,594 4,509 5,213 5,103 4,446

Profit 583 1,076 1,427 181 1,799 1,901 2,450 1,430 3,144 3,505 4,977 3,083

Total assets 36,660 49,973 54,290 39,137 40,219 64,561 68,600 70,382 85,664 89,848 111,570 113,647

Net assets 3,533 5,263 7,152 7,325 9,157 12,144 14,020 15,818 21,368 26,951 31,323 34,119

Interest‐bearing debt 7,562 10,520 14,505 13,175 11,915 25,345 23,148 26,926 29,913 30,130 38,611 38,091

(Unit: million yen)


Main financial indicators Corporate data

FY3/11(Listed on TSE 1st sec.)(stock split in Aug. *note 1)

FY3/12 FY3/13 FY3/14FY3/15

(stock split in Aug. *note 2)

FY3/16 FY3/17

Net assets per share (cons.) 1,867.97 2,143.39 2,414.98 3,276.42 2,053.83 2,311.32 2,511.23

Net income per share (cons.) 339.31 385.71 225.16 494.77 274.76 387.09 239.31

Dividend per share 50.00 60.00 60.00 65.00 40.00 44.00 44.00

(of which commemorative dividend) (5.00 )

(of which interim dividend) (0.00 ) (25.00 ) (30.00 ) (30.00 ) (18.00 ) (22.00 ) (22.00 )

Dividend payout ratio 14.7% 15.6% 26.6% 13.1% 14.6% 11.4% 18.4%

Number of shares outstanding 6,347,800 6,353,200 6,355,200 6,358,800 12,813,200 12,875,600 12,894,000

Return on equity (cons.) 18.3% 19.2% 9.9% 17.4% 14.9% 17.8% 9.9%

Return on assets (cons.) 5.7% 6.8% 4.2% 4.6% 5.9% 4.3% 3.9%

Equity ratio (cons.) 18.4% 19.8% 21.8% 24.3% 29.3% 26.7% 28.5%

Net debt equity ratio 1.4 0.9 1.0 0.8 0.7 0.6 0.7

Number of employees (cons.) 402 411 511 752 797 1,132 1,148

Note 1: ALCONIX conducted a 2‐for‐1 stock split on August 1, 2010 and August 1, 2014. The net income per share in FY3/10 and FY3/15 were assumed that the stock split was previously conducted.

Note 2: ALCONIX paid a year‐end dividend for FY3/11 of 50 yen per share, consisting of its original 45 yen dividend plus five yen to commemorate its designation for listing on the First Section of the Tokyo Stock Exchange.

Net income per share: Not considered potential stockReturn on Asset = Ordinary profit / (Average of year‐start and year‐end total assets of FY)Return on Equity = Profit / (Average of year‐start and year‐end net assets of FY, excluding non‐controlling interests and subscription rights to share)Net debt equity ratio = (Interest‐bearing debt ‐ Cash and deposits) / Net assetsNumber of employees: Excludes directors of the Company and employees dispatched from temporary staff agencies, but includes seconded employees dispatched from the Company to other companies, contract staff, and staff dispatched from other companies. All figures are based on the securities report (“Yukashoken Hokokusho”)


Market position (share) Corporate data

50

2020

102010

5030


Main shareholders

Name of shareholders Number of shares held

Shareholding ratios

BBH FOR FIDELITY LOW‐PRICED STOCK FUND 1,138,400 8.83%

Japan Trustee Services Bank, Ltd. (Trust Account) 1,078,100 8.36%

Kobe Steel, Ltd. 853,600 6.62%

GOLDMAN SACHS INTERNATIONAL 502,620 3.90%

Mizuho Bank, Ltd. 396,000 3.07%

The Sumitomo Trust & Banking Co., Ltd. 372,000 2.89%

Fuji Machine Mfg. Co., Ltd. 356,400 2.76%

The Bank of Tokyo‐Mitsubishi UFJ, Ltd. 260,000 2.02%

The Master Trust Bank of Japan, Ltd. (Trust Account) 259,600 2.01%

Japan Trustee Services Bank, Ltd. (Trust Account 5) 206,100 1.60%

Others 7,471,180 57.94%

Total 12,894,000 100.00%

BBH FOR FIDELITYLOW‐PRICED STOCK FUND

8.83%GOLDMAN SACHS INTERNATIONAL

3.90%


Category Number of shares held

Shareholding ratios

Number of shareholders Composition

Financial institutions 3,515,800 27.27% 27 1.02%

Financial instruments firms 539,707 4.19% 29 1.09%

Other Japanese entities 2,866,660 22.23% 59 2.22%

Overseas entities 2,735,992 21.22% 79 2.97%

Individual investors, others 3,235,428 25.09% 2,463 92.66%

Treasury shares 413 0.00% 1 0.04%

Total 12,894,000 100.00% 2,658 100.00%


Japan Trustee Services Bank, Ltd. (Trust Account)

8.36% Kobe Steel, Ltd.

6.62%

Mizuho Bank, Ltd.

3.07%

The Sumitomo Trust & Banking Co., Ltd.

2.89%

Fuji Machine Mfg. Co., Ltd.

2.76%The Bank of Tokyo‐Mitsubishi UFJ, Ltd.

2.02%The Master Trust Bank of Japan, Ltd.

(Trust Account)

2.01%

Japan Trustee Services Bank, Ltd. (Trust Account 5)

1.60%

Others

57.94%

Corporate data


Shareholder returns: Trend in dividend per share and dividend payout ratio Corporate data

Total interim dividends (after the August 2014 stock split)Total year‐end dividends (after the August 2010 and August 2014 stock splits)

Dividend payout ratio(consolidated)

Increase of 5 yen due to stock split

Increase of 2 yen due to stock split

Increase of year‐end dividend by

4 yen(Yen)

FY3/06 FY3/07 FY3/08 FY3/09 FY3/10 FY3/11 FY3/12 FY3/13 FY3/14 FY3/15 FY3/16

Dividend payout ratio(consolidated)

FY3/17


Stock price indicator Corporate data

April 1, 2015 – March 31, 2017Stock price

Adjusted closing price (yen) Record high market capitalization: June 12(28,167 million yen)

June 12, 2015(Highest)2,193 yen

June 12, 2015Estimated PER: 5.9Estimate PBR: 1.0

Note: Market capitalization represents monthly average

2015Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.

2016Jan. Feb. Mar.. Apr. May Jun. Jul. Aug. Sep.

Market capitalization (million yen)Adjusted closing priceMarket cap(million yen)

Oct. Nov. Dec.2017Jan. Feb. Mar.

2015Apr.


Market Chart (Reference Materials)


Non‐ferrous metal application 1 (smartphones)

Smartphone shipments have peaked worldwide and demand is declining, but high‐quality, high‐performance models are accounting for a larger share of sales

Market chart (reference materials)

【スマートフォン出荷台数(四半期ベース）】

データ出所：米調査会社IDC

PWB‐ Aluminum‐ Copper‐ Ceramic

LCD panel(Touch panel) ‐ Indium ‐ Tin‐ Copper ‐ Silicon

Vibrator‐ Neodymium ‐ Dysprosium‐ Iron ‐ Copper ‐ Tungsten

Camera‐ Copper ‐ Nickel ‐ Gold ‐ Lanthanum

Earphones AC Jack‐ Gold ‐ Nickel ‐ Neodymium ‐ Dysprosium

Body‐ Aluminum‐Magnesium‐ Antimony

IC‐ Gold ‐ Silver ‐ Copper ‐ Silicon ‐ Gallium

Condenser‐ Titanium ‐ Barium ‐ Copper ‐ Nickel ‐ Zirconium ‐ Tantalum ‐ SamariumChip resistors‐ Iron ‐ Silver ‐ Nickel ‐ Copper ‐ ZincQuartz crystal units‐ Silicon ‐ Copper ‐ Nickel ‐ Gold

Batteries‐ Lithium ‐ Nickel ‐ Cobalt ‐ Aluminum

Smartphone Shipments (Quarterly)

Source: IDC (US research company)

(Million units)GlobalFirm AFirm BFirm C


Market chart (reference materials)Non‐ferrous metal application 2 (automobiles)

【国内販売台数、HV⾞割合】

データ出所：⽇本⾃動⾞部品協会

Motors for auto equipment(starter, power steering, power window, wiper, seat adjust, etc.)‐ Copper ‐ Neodymium‐ Barium ‐ Strontium

Driving motors(hybrid vehicle)‐ Neodymium‐ Dysprosium‐ Aluminum‐ Copper

Wheels‐ Aluminum‐Magnesium

Pipes‐ Copper

Exhaust emission control system (catalyst)‐ Platinum ‐ Rhodium‐ Palladium ‐ Lanthanum‐ Cerium

Body, interior, electriccomponents‐ Aluminum‐Molybdenum‐ Copper ‐ Antimony‐ Zinc

Car batteries (hybrid vehicle)‐ Nickel ‐ Cobalt‐ Lithium ‐ Lanthanum

【国内販売台数、HV車割合】Number of Domestic Sales; Share of HV

(Thousand units) Total four‐wheel vehicle sales Total HV sales Ratios

Source: Next Generation Vehicle Promotion Center

Engine room, radiator‐ Aluminum‐ Copper‐ Zinc


Non‐ferrous metal application 3 (aircraft)

Global private‐sector aircraft demand is forecast to double over the next 20 years.

航空機はアルミニウム、チタンを中⼼にレアメタル・レアアースを含む多くの⾮鉄⾦属が使⽤されている。

Market chart (reference materials)

Fuselage, wings, fin stabilizer (external panels and structural parts)‐ Aluminum alloy(Aluminum, copper, magnesium, lithium, etc.)(External panels and structural parts: More than 50% of aircraft)

‐ Stainless steel (chrome/nickel, used in structural parts)‐Magnesium, titanium (joints, bolts, connectors)‐ Nickel, zinc (fuselage plating)

EnginesEngines require many high‐performance non‐ferrous alloys in order to withstand temperatures that range from far below freezing to well over 1,000 degrees. ‐ Titanium alloys (fan, engine frame, case, blades, etc.)(Alloy with vanadium, molybdenum, zircon, etc.)

‐ Nickel alloys (turbine and especially the high‐temperature section after the compressor)(Alloy with chromium, tantalum, molybdenum, niobium, tungsten, etc.)

* Titanium and nickel account for more than 40% of materials used to make jet engines.

Landing gear (leg parts)‐ Nickel ‐ Chrome ‐Molybdenum* Landing gear parts, which require the greatest strength, use nickel‐chrome‐molybdenum steel.

Aircraft use many types of non‐ferrous metals, mainly aluminum and titanium, including minor metals and rare earths.

【地域別ジェット旅客機運航機数および需要予測】

データ出所：日本航空機開発協会

Passenger Jet Aircraft Worldwide and Projected Demand

Source: Japan Aircraft Development Corporation

Current no. of aircraftProjected future demand

Number of aircraft operating

End of 2015: 20,814

End of 2035: 38,313

Estimated increase 2016‐2035: 33,160

North America

Europe Asia/Pacific Middle East

Latin America

Africa

These materials were prepared to help investors understand ALCONIX and were not intended as a solicitation for investment in ALCONIX. These materials were prepared carefully for accuracy, but the completeness of these materials cannot be guaranteed. ALCONIX will not be held responsible for any problems or damages that result from the information provided in these materials. Earnings forecasts and other future forecasts in these materials were made based on the judgment of ALCONIX using information available at the time these materials were prepared. These forecasts embody latent risk and uncertainty. Please understand that actual earnings may differ from these forecasts due to changes in the business environment and other factors.

Documents

ALCONIX FY2016 4Q kikan part2 E 170601 revised(web)mw2pemthym.bizmw.com/wordpress/wp-content/uploads/2017/... · 2017. 9. 4. · Three main characteristics of the ALCONIX Group Business