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201205 4qresults

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201205 4qresults

  1. 1. Translation Notice: This English version is a translation of the original Japanese document and is only for reference purposes. In the case where any differences occur between the English version and the original Japanese version, the Japanese version will prevail. Member of the Financial Accounting Standards Foundation April 27, 2012 CONSOLIDATED FINANCIAL RESULTS for the Year Ended March 31, 2012 (Unaudited) <under Japanese GAAP>Company name: Nippon Electric Glass Co., Ltd.Listing: First Section of the Tokyo Stock Exchange First Section of the Osaka Securities ExchangeSecurities identification code: 5214URL: http://www.neg.co.jp/Representative: Masayuki Arioka, President and Representative DirectorInquiries: Motoharu Matsumoto, Director and Senior Vice President TEL: +81-77-537-1700 (from overseas)Scheduled date of ordinary general meeting of shareholders: June 28, 2012Scheduled date to commence dividend payments: June 29, 2012Scheduled date to file securities report: June 29, 2012Supplementary material on financial results: YesFinancial results presentation meeting: Yes (for institutional investors and analysts) (in millions of yen with fractional amounts discarded, unless otherwise noted)1. Consolidated performance for the year ended March 31, 2012 (From April 1, 2011 to March 31, 2012)(1) Consolidated operating results (Percentages indicate year-on-year changes.) Net sales Operating income Ordinary income Net income For the year ended % % % % March 31, 2012 338,214 (13.3) 61,638 (47.5) 56,855 (50.3) 19,408 (71.7) March 31, 2011 390,195 17.4 117,471 19.3 114,299 25.0 68,608 24.9Note: Comprehensive income: For the year ended March 31, 2012: 14,819 million yen [(78.0%)] For the year ended March 31, 2011: 67,507 million yen [15.3%] Net income per Diluted net Net income/ Ordinary income/ Operating income/ share income per share equity total assets net sales For the year ended yen yen % % % March 31, 2012 39.02 - 4.2 8.2 18.2 March 31, 2011 137.92 - 15.8 17.1 30.1Reference: Equity in earnings of affiliates: For the year ended March 31, 2012: None For the year ended March 31, 2011: None –1–
  2. 2. (2) Consolidated financial position Total assets Net assets Equity ratio Net assets per share As of % yen March 31, 2012 687,069 475,736 68.4 945.47 March 31, 2011 692,622 468,037 66.9 932.17Reference: Equity: As of March 31, 2012: 470,283 million yen As of March 31, 2011: 463,709 million yen(3) Consolidated cash flows Cash flows from Cash flows from Cash flows from Period-end cash and operating activities investing activities financing activities cash equivalents For the year ended March 31, 2012 83,736 (79,827) (14,731) 105,209 March 31, 2011 133,390 (96,822) (11,773) 116,3662. Cash dividends Annual dividends Ratio of Total cash Dividend payout dividends to net First Second Third dividends ratio assets Year- (Total) (Consolidated) (Consolidated) quarter- quarter- quarter- Total end end end end yen yen yen yen yen % % For the year ended March 31, 2011 - 6.00 - 7.00 13.00 6,466 9.4 1.5 March 31, 2012 - 7.00 - 8.00 15.00 7,461 38.4 1.6 For the year ending March 31, 2013 - 8.00 - 8.00 16.00 ––– - ––– (Forecasts)3. Consolidated earnings forecasts for the fiscal year ending March 31, 2013 (From April 1, 2012 to June 30, 2012) (Percentages indicate year-on-year changes.) Net income Net sales Operating income Ordinary income Net income per share % % % % yen For the three months 70,000 - (26.9) - 2,500 - (91.1) - 1,500 - (94.5) - 500 - (96.3) - 1.01 - ending June 30, 2012 80,000 (16.4) 7,500 (73.2) 6,500 (76.4) 3,500 (74.4) 7.04 –2–
  3. 3. * Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None(2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements after error corrections A. Changes in accounting policies due to revisions to accounting standards: None B. Changes in accounting policies due to other reasons: None C. Changes in accounting estimates: None D. Restatement of prior period financial statements after error corrections: None(3) Number of issued shares (common stock) A. Total number of issued shares at the end of the period (including treasury stock) As of March 31, 2012 497,616,234 shares As of March 31, 2011 497,616,234 shares B. Number of treasury shares at the end of the period As of March 31, 2012 206,939 shares As of March 31, 2011 166,179 shares C. Average number of shares during the period For the year ended March 31, 2012 497,422,116 shares For the year ended March 31, 2011 497,459,004 sharesSUMMARY OF NON-CONSOLIDATED FINANCIAL RESULTS (Reference)Non-consolidated performance for the year ended March 31, 2012(From April 1, 2011 to March 31, 2012)(1) Non-consolidated operating results (Percentages indicate year-on-year changes.) Net sales Operating income Ordinary income Net income For the year ended % % % % March 31, 2012 280,080 (17.2) 46,648 (52.6) 47,862 (55.7) 16,258 (75.5) March 31, 2011 338,166 11.9 98,461 2.2 108,041 13.2 66,438 12.1 Diluted net income per Net income per share share For the year ended yen yen March 31, 2012 32.68 - March 31, 2011 133.56 -(2) Non-consolidated financial position Total assets Net assets Equity ratio Net assets per share As of % yen March 31, 2012 639,081 434,915 68.1 874.36 March 31, 2011 643,455 427,951 66.5 860.29Reference: Equity: As of March 31, 2012: 434,915 million yen As of March 31, 2011: 427,951 million yen –3–
  4. 4. * Indication regarding execution of audit proceduresAt the time of disclosure of this financial results report, the audit procedures for the consolidatedfinancial statements and non-consolidated financial statements in accordance with the FinancialInstruments and Exchange Act were incomplete.* Proper use of earnings forecasts, and other special directions(Proper use of earnings forecasts)The forward-looking statements, including earnings forecasts, contained in these materials are based oncertain assumptions deemed to be reasonable by the Company and its subsidiaries (“the NEG Group”)and include risks and contingencies. Actual business results may differ substantially due to a number offactors. For more details, please refer to the section of “(iii) Outlook for the fiscal year ending March 31,2013 of (1) Analysis regarding operating results in 1. Operating results” on page 6. –4–
  5. 5. 1. Operating results(1) Analysis regarding operating results(i) Overview of the fiscal year under review (from April 1, 2011 to March 31, 2012) In the global economy, the uncertain situation continued despite steps toward gradual recovery in the U.S., mainly because of the stagnation in most European countries resulting from the sovereign debt crisis as well as the weakening pace of growth in China. In the Japanese economy, the business environment faced by the domestic manufacturing industry continued to be extremely severe as a result of deterioration in the export climate mainly due to the strength of the yen last year and this year, weak personal consumption, electric power problems, and high crude oil prices, among other factors. This was despite of the economy recovering gradually in line with restoration and reconstruction following the Great East Japan Earthquake. The environment surrounding the NEG Group was increasingly severe day by day as customers made substantial downward revisions to production levels amid continuing adjustment in the market. In this environment, even though our business performance showed signs of moderate recovery in the first quarter (from April 1, 2011 to June 30, 2011), it slowed in the second quarter (from July 1, 2011 to September 30, 2011) as the business environment became more severe. From the third quarter (from October 1, 2011 to December 31, 2011), our business performance declined steadily, mainly because of further deteriorating situations for many product fields, price declines, and having to implement production adjustments. Furthermore, in the fiscal year under review, impairment loss on production facilities was recognized for the glass for plasma display panels (PDP) business. As a result of the above, our performance in the fiscal year under review was substantially lower than that of the previous fiscal year.(ii) Operating results for the fiscal year under review (Billions of yen) Fiscal year ended Fiscal year ended Change (%) March 31, 2011 March 31, 2012 Net sales 390.1 338.2 (13) Operating income 117.4 61.6 (48) Ordinary income 114.2 56.8 (50) Net income 68.6 19.4 (72) Note: Amounts less than 100 million yen are omitted. (Sales by products) Fiscal year ended Fiscal year ended Change Reporting March 31, 2011 March 31, 2012 Category segment billions billions billions (%) (%) (%) of yen of yen of yen Glass for electronic and 328.5 84 272.4 81 (56.1) (17) Glass information Business devices Glass for 61.6 16 65.7 19 4.1 7 others Total 390.1 100 338.2 100 (51.9) (13) Note: Amounts less than 100 million yen are omitted. (Net sales) Glass for electronic and information devices: Sales of glass for flat panel displays (FPDs) switched to a gentle recovery in the first quarter but then slowed in the second quarter due to the effect of production adjustments by customers. From the third quarter, product prices declined because there was little improvement in supply and –5–
  6. 6. demand, and sales were weak overall as a result. Sales of glass related to optical products were generally firm on the back of communications infrastructure demand in emerging countries, despite signs of an adjustment phase in the second and third quarters. Regarding sales of cover glass for image sensors, increased shipments for digital single lens cameras compensated for a slump in sales for compact digital cameras. Sales of substrate glass for solar batteries were favorable. Glass for others: For glass fiber, the pace of sales from the beginning of the fiscal year under review exceeded that of the previous fiscal year thanks to solid overseas demand for its application in auto parts. Even so, sales slowed down towards the fiscal year-end due to an adjustment phase that started in the summer. Regarding sales in the business areas of heat resistant glass, building materials and others, the recovery that had started in the housing industry and related markets lost its tempo, and there was also weakening production in some fields. As a result, sales remained weak overall. (Profits) Factors constraining profits included declining sales and falling prices, as well as lowered capacity utilization resulting from production adjustments to reduce inventory and the execution of facility repairs and improvements and other works, while productivity improvements took longer than initially expected. Profits were also under downward pressure from increased depreciation and amortization costs and fuel costs. In addition, loss related to the competition law with respect to glass for color cathode ray tubes and impairment loss on production facilities for glass for PDPs were recorded under extraordinary loss. Also, the NEG Group conducted a reversal of deferred tax assets following a tax revision. As a result of the above, profits were significantly lower than those of the previous fiscal year.(iii) Outlook for the fiscal year ending March 31, 2013 (Billions of yen) Three months ended Three months ending June 30, 2012 Change (%) June 30, 2011 Net sales 95.7 70.0 - 80.0 (27) - (16) Operating income 28.0 2.5 - 7.5 (91) - (73) Ordinary income 27.5 1.5 - 6.5 (95) - (76) Net income 13.6 0.5 - 3.5 (96) - (74) Note: Amounts less than 100 million yen are omitted.The current uncertain situation is expected to continue, primarily with respect to movements in the globaleconomy but also including raw material and fuel prices and fluctuations in foreign exchange rates.Under such an environment, in the business of substrate glass for liquid crystal displays (LCDs), our corebusiness, a structure has been developed to facilitate an efficient response to future demand. This hasbeen achieved with the start up of facilities to accommodate the thinning of glass substrates and thecompletion of a series of facility repairs. In addition, demand is recovering in the electronic devicesrelated field and glass fiber, among others. In view of this background, the NEG Group’s businessperformance is expected to recover gently, having bottomed out in the fourth quarter of the fiscal yearunder review (from January 1, 2012 to March 31, 2012). As such, although the business performance inthe next quarter (the first quarter of the fiscal year ending March 31, 2013; from April 1, 2012 to June 30,2012) is not expected to reach the level of the same period of the fiscal year under review, both sales andprofits are expected to show improvements on the fourth quarter of the fiscal year under review.Regarding future prospects, there are concerns about further declines in product prices due to intensifiedcompetition in the our customers’ industry sectors and demand trends, while macroeconomic conditionsmay have an adverse impact on business performance on the cost front, and as a result, on an overalllevel the business environment is forecast to continue to be severe. However, the NEG Group’s businessperformance is expected to continue on a gentle recovery track in the second quarter (from July 1, 2012to September 30, 2012), thanks to the expected effects of productivity improvements. –6–
  7. 7. (Concerning Disclosure of Earnings Forecasts) In addition to the disclosure of information according to the standards for timely disclosure stipulated by the stock exchanges, the NEG Group provides earnings forecast for current reporting period as described in the table below, aiming to deliver earlier and more appropriate earnings information to investors. Earnings forecast for current reporting period Disclosure schedule (cumulative basis) (disclosure of numerical figures) Late June Three months Late September Six months Late December Nine months Late March Full year Note: The outlook for the next reporting period (three-month basis) will be disclosed with the quarterly financial results report, which is disclosed at the time the quarterly earnings results are announced. The forward-looking statements, including earnings forecasts, contained in these materials are based on certain assumptions deemed to be reasonable by the NEG Group and include risks and contingencies. Actual business results may differ substantially due to a number of factors. Factors that may impact actual business results include the economic conditions of global markets, various rules and regulations such as those concerning trade, significant fluctuation of supply and demand of products in principal markets as well as the financial situation showing extensive changes in prices on capital markets and extensive changes in exchange rates between the yen and other major currencies such as the U.S. dollar and the Euro, interest rates and rapid technological advancement. Factors not mentioned here also could have a significant impact on business results.(2) Analysis regarding financial position(i) Overview of consolidated financial position for the fiscal year under review (Billions of yen) As of March 31, 2011 As of March 31, 2012 Change Total assets 692.6 687.0 (5.6) Liabilities 224.5 211.3 (13.2) Net assets 468.0 475.7 7.7 Note: Amounts less than 100 million yen are omitted. (Total assets) In current assets, cash and deposits decreased, mainly due to the payment of capital for facilities. In addition, due to a fall in sales, while there was a decrease in notes and accounts receivable trade, merchandise and finished goods increased. Apart from these movements, there was a decrease in deferred tax assets. Regarding fixed assets, although there was impairment on production facilities for glass for PDPs, there was an increase in production facilities mainly for glass for LCDs, and tangible fixed assets increased as a result. Furthermore, deferred tax assets under investments and other assets increased following the above-mentioned impairment loss. (Liabilities) Regarding current liabilities, there was an increase in other under current liabilities under current liabilities mainly due to an increase in accounts payable-other in connection with facilities, despite a decrease in income taxes payable due to the payment of tax and a decline in profit in the current period. In noncurrent liabilities, provision for special repairs increased, while there was a decrease in long-term loans. –7–
  8. 8. (Net assets) Although retained earnings increased, there were decreases in both valuation difference on marketable securities due to stagnation in the stock market, and foreign currency translation adjustments from the erosion of investments into overseas subsidiaries due to appreciation in the yen.(ii) Overview of consolidated cash flows for the fiscal year under review (Billions of yen) Fiscal year ended Fiscal year ended March 31, 2012 Change March 31, 2011 Cash flows from operating 133.3 83.7 (49.6) activities Cash flows from investing (96.8) (79.8) 17.0 activities Cash flows from financing (11.7) (14.7) (3.0) activities Period-end cash and cash 116.3 105.2 (11.1) equivalents Note: Amounts less than 100 million yen are omitted. Cash flows from operating activities Net income before income taxes decreased substantially, while there was an increase in inventories. As a result, there was a decline in proceeds compared to the previous fiscal year, despite a decrease in income taxes paid. Cash flows from investing activities There was a decrease in expenditure compared to the previous fiscal year mainly because of a decline in expenditure resulting from acquisition of fixed assets. Cash flows from financing activities While there were increases in proceeds from long-term loans and others, there were also expenditures including the repayment of short-term loans and dividend payments. As a result, there was an increase in expenditure compared to the previous fiscal year.(iii) Trends of cash-flow related indices March 31, March 31, March 31, March 31, March 31, Fiscal year ended 2008 2009 2010 2011 2012 Equity ratio (%) 58.5 59.3 62.2 66.9 68.4 Market value-based equity ratio 130.4 58.0 101.3 84.6 52.1 (%) Interest-bearing debt to cash 0.9 1.5 0.8 0.7 1.0 flows ratio (years) Interest coverage ratio (times) 69.4 53.2 66.6 123.6 86.3 Equity ratio: Shareholders’ equity / Total assets Market value-based equity ratio: Market capitalization / Total assets Interest-bearing debt to cash flows ratio: Interest-bearing debt / Operating cash flow Interest coverage ratio: Operating cash flow / Interest paid Notes: 1. All calculations are based on consolidated financial figures. 2. Market capitalization was calculated based on the number of issued shares excluding treasury stock. 3. For cash flows and interest paid, calculations use “cash flows from operating activities” and “interest expenses paid,” respectively, in the consolidated statement of cash flows. Moreover, interest-bearing debt corresponds to long- and short-term loans payable, bonds payable and commercial papers included in liabilities presented in the consolidated balance sheet. –8–
  9. 9. (3) Basic policy on allocation of profits and cash dividends for this fiscal year and next fiscal year (Basic policy) While ensuring adequate retained earnings to provide for reinforcement of the Company’s financial standing and future business development, the Company decides on the amount of dividend payment based on a basic policy of maintaining a long-term and stable return of profits to shareholders that is not significantly affected by fluctuations in earnings, but it also takes the financial situation etc. into consideration. Regarding the funds from retained earnings, the Company aims to fulfill the expectations of shareholders through boosting its corporate value by appropriating retained earnings funds for future research and development and future business expansion. (Year-end dividend) The Company shall present the year-end dividend payment of 8 yen per share (which combined with the 7 yen per share interim dividend makes an annual dividend of 15 yen per share, an increase of 2 yen from the previous fiscal year) for approval at the Ordinary General Meeting of Shareholders scheduled to be held on June 28. (Dividend forecast for the next fiscal year) Both the interim dividend and the year-end dividend are expected to be 8 yen per share, respectively (annual dividend of 16 yen per share), an increase of 1 yen from the fiscal year under review. –9–

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