FY2020 ended March 31,2020 Financial Results …...NIHONPARKERIZINGCO.,LTD. FY2020 ended March 31,2020 Financial Results Briefing May 29, 2020 （ Note ） Due to the spread of covid-

NIHONPARKERIZINGCO.,LTD.

FY2020 ended March 31,2020

Financial Results Briefing

May 29, 2020

（Note）Due to the spread of covid-19, the financial results briefing for the year ending March 31, 2020 was canceled. So we have disclosed the only the materials.


Table of contents Overview of FY2020 ended March 31,2020 Business segment and sales composition ratios Consolidated financial highlights Consolidated quarterly trend Consolidated income statement Financial results of business segments by area Variation analysis of operating income Summary of non-operating income Capital investment R&D Consolidated balance sheet Consolidated cash flow

Forecast of FY2021 ended March 31, 2021 Dividend policy and shareholder return Progress of third mid-term management plan Measures against COVID-19 Enhancing the profitability of existing businesses Developing of new products and new markets Supplementary information Consolidated financial highlights Subsidiaries and affiliated companies

2


Chemical38%

Equipment20%

Jobbing38%

Other4%

2020/3

Business segment and sales composition ratios

3

Sales consolidated

119,028million yen

Chemicals

Surface treatment chemicals for adding corrosion resistance, creating a paint base, providing lubrication, cleaning substrates, design features and other various purpose.

Rust proof oil and packaging material Rolling oil and lubricants Electroless plating solution（KANIGEN PLATING） Other products

Equipment

Plant for automotive industries Pretreatment, E-coat equipment for general

industries Powder Coating Equipment（PARKER IONICS） Wet booths and Dry booths

Jobbing

Rust proof coating Salt-Bath Nitriding（ISONITE） Gas carburizing, carbontriding, low temperature

carbonitriding Gas nitrocarburizing Electroless plating process（KANIGEN PLATING） Other various surface treatment

Other Building maintenance Transport of chemical products Manufacture and sale of metal test pieces Manufacture and sale of bolts


Consolidated financial highlights

4

（Unit: million yen）

102,514109,063 109,569

114,840

129,207

119,028

14,850 15,766 16,934 17,984 17,02312,601

17,453 17,921 18,779 20,750 20,13015,723

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2015/3 2016/3 2017/3 2018/3 2019/3 2020/3

Sales Operating income Ordinary income


Consolidated quarterly trend

5


28,091

31,896 32,251

36,968

30,696 29,270 28,769

30,291

3,998 4,197 5,002 3,825 3,957 3,652 3,188 1,802

5,066 4,979 5,690 4,393 5,146 4,116 3,903

2,557

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

１Q ２Q ３Q ４Q １Q ２Q ３Q ４Q

2019/3 2020/3

Sales Operating income Ordinary income


Consolidated income statement

6

Overseas sales ratio 34.8%（※Including exports from japan） Foreign currency translation effect:

Sales approx. ▲1,095 million yen, Operating income approx. ▲44 million yen


2019/3 2020/3 Change % Change

Net Sales 129,207 119,028 ▲10,178 ▲7.9％ Decreased in both domestic and overseas.

Operating income 17,023 12,601 ▲4,421 ▲26.0％Decreased due to decrease of sales.Depreciation was increased due to capital investment.

Ordinary income 20,130 15,723 ▲4,406 ▲21.9％ Non-operating income 4,096Non-operating expenses 974

Net income attributable to parent company shareholders 11,424 9,449 ▲1,974 ▲17.3％ Extraordinary gain 589

Extraordinary loss 752

Net income per share 94.20 yen 78.87 yen - -

Ratio of ordinary income tototal assets 9.2% 7.2% - -

Return on equity（ROE） 8.2% 6.7% - -

The average exchange rate(USD) 110.43 yen 109.05 Yen - -


Financial results of business segments by area

7

（Unit: million yen）Net sales Operating income

2019/3 2020/3 Changes 2019/3 2020/3 ChangesChemicals 48,723 45,920 ▲2,803 8,581 7,546 ▲1,035

Japan 29,894 28,758 ▲1,136 4,646 4,344 ▲302Oversea 17,763 16,095 ▲1,667 3,395 2,648 ▲746Inter-segment 1,065 1,065 0 539 552 13

Equipment 30,975 25,169 ▲5,806 1,125 595 ▲530Japan 15,425 10,849 ▲4,575 444 311 ▲132Oversea 15,088 13,647 ▲1,440 377 ▲54 ▲432Inter-segment 461 671 210 303 338 34

Jobbing 46,074 45,225 ▲848 8,354 7,323 ▲1,031Japan 27,232 26,716 ▲516 5,337 5,188 ▲149Oversea 18,802 18,483 ▲318 2,799 1,934 ▲865Inter-segment 39 26 ▲13 217 200 ▲16

Others 6,315 5,919 ▲396 237 ▲1,123 ▲1,361Adjustments and Eliminations ▲2,881 ▲3,206 ▲324 ▲1,277 ▲1,739 ▲462

Total 129,207 119,028 ▲10,178 17,023 12,601 ▲4,421

Due to the economic downturn caused by the US-China trade problem, consumption tax increase in japan and the spread of COVID-19 in the world, sales and profits decreased in all segments.

(Note) Sales and profit of each segment include internal sales and transfers between segments.


17,023

12,601

▲3,187

＋164 ▲45 ▲562 ＋405 ▲1,198

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2019年3月期売上高の減少原材料価格変動

為替の影響減価償却費人件費その他経費 2020年3月期2019/3 2020/3

Variation analysis of operating income

8

+1,167百万円


ForeignCurrency

Translationeffect Labor

cost Other

Rawmaterial

cost Depreciation

Sales decreased

SG&A expense


Summary of non-operating income

In addition to the interest and dividend income, we recorded the profit from equity method for affiliates in japan and china and technical license fee. As a result, non-operating income was 3,121 million yen.

9


2019/3 2020/3 Change

Interest income 353 418 ＋64

Dividend income 660 680 ＋20

Equity in earnings of affiliates 1,134 1,321 ＋186

License royalty 463 426 ▲37

Other income 1,145 1,248 ＋102

Total of non-operating income 3,759 4,096 337

Interest expense 50 38 ▲11

Other expense 601 935 ＋334

Total of non-operating expense 652 974 ＋322

Non-operating profit, net 3,106 3,121 ＋14


Capital investment

10

In the jobbing segment, we implemented a capital investment for the enhancement of heat treatment and rust prevention processing equipment.

Japan 2,429 million yen, US 1,070 million yen, China 1,925 million yen.


5,168 6,486

5,750

3,663

5,436 5,802

2,228

2,182

1,019

2,898

2,150 1,418

82

202

365 98

123 239

2,541

1,667

798 2,007 827 1,515

10,020 10,539

7,933 8,668 8,536

8,974

0

2,000

4,000

6,000

8,000

10,000

12,000

2015/3 2016/3 2017/3 2018/3 2019/3 2020/3

Jobbing Chemicals Equipment Others

4,743 3,714 3,520

4,261 4,977 5,100

5,276 6,825

4,413 4,407 3,559 3,874

10,020 10,539

7,933 8,668 8,536

8,974

0

2,000

4,000

6,000

8,000

10,000

12,000

2015/3 2016/3 2017/3 2018/3 2019/3 2020/3

Japan Oversea

By areaBy segment


R&D（1/2）

11

More than 130 professionals work at the central research laboratories. In addition to improvements to the corrosion prevention and tribological characteristics, we have

also been engaged in the development of technology for adding a variety of properties to surfaces including insulation, conductivity, hydrophilicity, water repellence, heat dissipation, and thermal insulation properties, among others.


2,112 2,181 2,303 2,302

2,154 2,220

0

500

1,000

1,500

2,000

2,500

2015/3 2016/3 2017/3 2018/3 2019/3 2020/3


R&D（2/2）

12

Conducting R&D to expand and develop new markets Meeting changing needs such as environmental needs (improvement of durability,

improving performance and energy efficiency, and chrome-free, etc.） In addition to rust prevention, create demand through development of diverse

functions ( insulation, conductivity, hydrophilicity, anti-finger print, design, etc.) Developing technologies for new markets. (aircraft, electronic parts, defense force,

medical parts, etc.）

Enhancing fundamental research Developing products for next generation vehicles and the aircraft market Nonferrous material, adhesive or joining between metal and different materials.

Function Applications

heat radiation ⇔ insulation Heat sink, Engine parts, Roof panel material

electric insulation ⇔ conductive Motor parts, Electromagnetic shielding material, Electrical component

adhesive ⇔ non-stickiness Rubber-resin-metal composite material, Seal material, Laminate material

hydrophilic ⇔ water-repellent, oil repellent Heat exchanger, Antifouling material

low friction ⇔ high friction Power train, Clutch, Slide rail

hardening ⇔ softening Sliding parts, Plastic working parts

stable rust layer ⇔ rust proof coating Weathering steel, Repair of building materials

other Fingerprint-resistant steel sheet


2019/3 2020/3 Change

Current assets 111,687 111,034 ▲653

Fixed assets 107,130 105,739 ▲1,391

Tangible and Intangible assets 63,284 64,966 +1,681

Investments and other assets 43,846 40,773 ▲3,073

Total assets 218,818 216,773 ▲2,044

Current liabilities 37,226 31,384 ▲5,842

Fixed liabilities 14,832 14,441 ▲390

Total liabilities 52,059 45,826 ▲6,232

Total net assets 166,759 170,947 +4,188

Shareholders' equity 131,253 136,183 +4,929

Accumulated other comprehensive profit 9,203 7,051 ▲2,152

Non-controlling interests 26,302 27,713 +1,411

Total liabilities and net assets 218,818 216,773 ▲2,044

Shareholders‘ equity ratio 64.2% 66.1%

※Shareholders‘ equity ratio＝（”Total net assets” – “Non-controlling interests”）／Total liabilities and net assets

Consolidated balance sheet

13

（Unit: million yen）Main factor of change

Securities ▲3,367

Cash dividends paid ▲2,649Current profit ＋9,449

Valuation difference on available-for-sale securities ▲2,174

translation adjustment ▲17

Acquisition ＋8,974Depreciation ▲6,516

Accounts payables ▲4,083

Shareholders‘ equity ratio is stable.


Consolidated cash flow

2019/3 2020/3Net cash provided by operating activities +17,292 +17,514

Profit before income taxes +19,492 +15,560

Depreciation and amortization +5,992 +6,516

Others ▲8,192 ▲4,561

Net cash used in investing activities ▲10,299 ▲8,732Purchase of property, plant and equipment ▲8,823 ▲9,171

Others ▲1,476 438

Net cash used in financing activities ▲5,663 ▲6,109Cash dividends paid ▲2,966 ▲2,704

Others ▲2,697 ▲3,405

Effect of exchange rate change on cash and cash equivalents ▲753 +109Net increase (decrease) in cash and cash equivalents +576 +2,781Cash and cash equivalents at beginning of the fiscal year 53,149 53,726Cash and cash equivalents at end of the fiscal year 53,726 56,507

14


Free cash flow (“Operating cash flow”-“Cash flow from investing activities”) is positive.


Forecast for FY2021 ended March 31, 2021

15


2020/3Actual

2021/3Forecast Change % Change

Net Sales 119,028 - - -

Operating income 12,601 - - -

Ordinary income 15,723 - - -

Net income attributable to parent company shareholders 9,449 - - -

The average exchange rate(USD) 109.05 yen -

At this time, it is difficult to estimate the impact of spread infection of COVID-19, so we can not estimate the forecast. We will promptly disclose the forecast when it becomes possible.


Dividend policy Based on a target payout ratio of 25% on a consolidated basis, we will determine

the amount of dividends after giving sufficient consideration to consolidated achievements, retained earnings required for future business development, etc.

Although sales and profits decreased in FY2020 compared to the previous year, we will increase the dividend to increase returns to our shareholders.

Dividend policy and shareholder return

16

（Note）Dividend for FY2021 ending March 2021 is not decided at this time, it is not be described.

7.50 7.50 10.00 10.00 11.00 11.00

7.50 9.00 10.00 11.00 11.00 13.00

2.00 15.00 16.50

20.00 23.00 22.00

24.00 18.6% 19.8% 20.2%

21.9%23.4%

30.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

0.00

10.00

20.00

30.00

40.00

50.00

60.00

2015/3 2016/3 2017/3 2018/3 2019/3 2020/３ 2021/３

Year-End（Commemorative）

Year-End（Ordinary）

Interim

Payout ratio (Consolidated)

Undecided


Progress of third mid-term management plan

17

Sales and profits decreased in all segments in FY2020.Due to the expansion of COVID-19,

Prolonged recession will be expected.FY2021 forecast is undecided.We will continue to implement key measures.Enhancing the profitability of existing

businessesDeveloping of new products and new

markets

2019/3 2022/3Difference

Actual TargetSales 119,028 133,500 ▲ 14,472

Chemicals 44,854 50,000 ▲ 5,146Equipment 24,497 26,000 ▲ 1,503Jobbing 45,199 51,500 ▲ 6,301Others 4,477 6,000 ▲ 1,523

Operating income 12,601 19,000 ▲ 6,399Ordinary income 15,723 22,000 ▲ 6,277


102,514109,063 109,569 114,840

129,207119,028

133,500

14,850 15,766 16,934 17,984 17,023 12,601 19,000

17,453 17,921 18,779 20,750 20,13015,723 22,000

17.0% 16.4% 17.1% 18.1%15.6%

13.2%16.5%

14.5% 14.5% 15.5% 15.7%13.2%

10.6%14.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2015/3 2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3

Sales Operating income Ordinary income Ordinary income ratio Operating profit marginTarget

Third mid-term plan

Forecast

is

undecided


Measures against COVID-19

We are implementing following measure; Established general headquarters for planning measures against

COVID-19 to ensure the safety of employees and their families and continue the business of our group.

Developing IT infrastructure to promote telecommuting and online meetings.

Use of satellite offices, staggered working hours and flexible working hours.

Temporarily suspended the operation of the factory. Assuming a prolonged recession, strongly promote cash out

control and cost reduction. Looking ahead to the future after the pandemic of COVID-19, we

are continuing to implement key measures of third mid-term management plan including “Strengthening the profitability of existing businesses" and “Developing of new products and development of new markets".

18


Enhancing the profitability of existing businesses

Strengthen group governance Human resource development Rationalization and reorganization

to enhance the profitability of existing businesses Strengthening of R&D system Reconstruction of manufacturing system Organizational reform Building group common infrastructure Strengthening group collaboration further Change corporate culture and the way of thinking

19


Development of new products and new markets

Healthcare and Medical field

Start selling antibacterial spray and electric scalpel

IoT and Robots

Providing new products using new technologies such as IoT, robots and others.


■Consolidated financial highlights

21

2015/3 2016/3 2017/3 2018/3 2019/3 2020/3

Net Sales 102,514 109,063 109,569 114,840 129,207 119,028

Operating income 14,850 15,766 16,934 17,984 17,023 12,601

Ordinary income 17,453 17,921 18,779 20,750 20,130 15,723

Net income attributable to parent company shareholders 9,975 10,320 12,228 12,721 11,424 9,449

Operating profit margin 14.5% 14.5% 15.5% 15.7% 13.2% 10.6%

Sales ordinary income ratio 17.0% 16.4% 17.1% 18.1% 15.6% 13.2%

Ratio of ordinary incometo total assets 9.9% 9.5% 9.7% 10.0% 9.2% 7.2%

Return on equity（ROE） 9.4% 8.9% 10.2% 9.7% 8.2% 6.7%

Shareholders‘ equity ratio 61.1% 61.5% 62.5% 62.9% 64.2% 66.1%



■Main sbsidiaries and affiliated companies (As of 31st March 2020)

22

（Korea）■Dae Han Parkerizing Co., Ltd.

（Taiwan）■Chung Jih Metal

Treatment Chemicals, Inc.

（Indonesia）■P.T. Nusantara Parkerizing■P.T. Parker Metal Treatment Indonesia ■P.T. Parker Engineering Indonesia

（Malaysia）■Nihon Parkerizing Malaysia Sdn Bhd

（Thailand）■Thai Parkerizing Co., Ltd.■PET Trading Co., Ltd.■Parker Engineering (Thailand) Co., Ltd.■Kanigen (Thailand) Co., Ltd. & 1 other

（China）■ Parker Surface Technologies (Shanghai) Co., Ltd.■Parker Engineering (Shanghai) Co., Ltd.■Kanigen (Shanghai) Trade Co., Ltd.■Guangzhou Parkerizing Co., Ltd.■Foshan Parker Surface Modification Co., Ltd.■RIZHAO PARKER SURFACE TREATMENT CO.,LTD.□Shenyang Parkerizing Co., Ltd.□Shanghai Parkerizing Co., Ltd.□Wuhan Parkerizing Chemical Co., Ltd.

（Vietnam）■Vietnam Parkerizing Co., Ltd.■Vietnam Parkerizing (Hanoi) Co., Ltd.■Parker Processing Vietnam Co., Ltd.

（India）■Nihon Parkerizing (India) PVT LTD■Parker Engineering (India) PVT LTD

（U.S.）■Parker Trutec Inc.■Parker Trutec MMI Inc.■Parker Engineering America■Delamin Nitriding Salts U.S.

（Mexico）■Parker Trutec Mexicana S.A de C.V.■Parker Eng. De Mexico S.A. de C.V.

（Belgium）■P.I of Europe NV

（The Philippines）■Philippine Parkerizing Inc.

（Japan）■Nihon Parkerizing Co., Ltd.■Parker Engineering Co., Ltd.■Parker Kako Co., Ltd.■Hamamatsu Netsushori Kogyo Co., Ltd.■Komatsu Parkerizing Co., Ltd.■Oita Parkerizing Co., Ltd.■Japan Kanigen Co., Ltd.t

■Kyodo Unso■Ozeki Chemical Industry Co., Ltd.■Hokkaido Parkerizing Co., Ltd.■Kyowa Manufacturing Co., Ltd.■Parker Giken Kogyo Ltd.■Paltec Test Panels Co., Ltd.■Million Chemicals Co., Ltd.

□Parker Corporation□Yuugen Co., Ltd.□Parker Netsushori Kogyo Co., Ltd.□Nagaizumi Parkerizing Co., Ltd.□Green-Techno

■ Nihon Parkerizing and subsidiaries□ Affiliated companies

（U.K.）■Delamin Nitriding Salts

NIHONPARKERIZINGCO.,LTD. 23

The forward-looking statements such as forecast of financial consolidated resultscontained in this document are based on the information currently available to theCompany and certain assumptions which are regarded as legitimate. Actual resultsmay differ from these forecast due to various factors.Significant factors which may affect actual results include but are not limited to;a)state of the economy b)fluctuations in exchange rates c)product competitiveness,d)regulations and e)limits of intellectual property protection.The information in this document is not intended to solicit investment.Please make investment decisions at your own discretion.

Documents

FY2020 ended March 31,2020 Financial Results …...NIHONPARKERIZINGCO.,LTD. FY2020 ended March 31,2020 Financial Results Briefing May 29, 2020 （ Note ） Due to the spread of covid-