Overview of Financial Results for Fiscal Year 2019 (ending March 31, - PowerPoint PPT Presentation

June 1, 2020 Dai Nippon Printing, Co., Ltd. Overview of Financial Results for Fiscal Year 2019 (ending March 31, 2020) and Medium-term Management Plan Briefing materials

2 1． Results Overview

FY2018 ▲0.5% 57.2 +39.1% Depreciation Expenses 59.1 54.5 ▲7.8% R&D Expenditures 33.8 33.6 Sales rose only slightly year on year, but business portfolio revamp drove product mix improvements, resulting FY2019 in sales and profit growth. A review of strategic shareholdings and other asset holdings in order to effectively use and streamline assets resulted in higher net income and ROE. The DNP Group (DNP) has opted to leave its forecasts for the fiscal year ending March 2021 pending due to the lack of visibility on the impact of COVID-19, and the consequent lack of a reasonable and appropriate basis on which to forecast earnings. It will promptly announce forecasts once it judges that this reasonable basis exists. (Unit: ¥ billions) 1. Overview of Consolidated Results for Fiscal Year 2019: Earnings Summary 41.1 Capital Expenditures － 7.3% Year-on-year Change Sales 1,401.5 1,401.9 +0.0% Operating Income 49.9 56.3 +12.8% 3 Ordinary Income 58.3 63.8 +9.5% Net Income Attributable to Parent Company Shareholders ▲35.7 69.5 － ROE －   

4 600 1. Overview of Consolidated Results for Fiscal Year 2019: positive impact of cost reductions achieved mainly by consolidating production bases. business processes for companies seeking to respond to labor shortages and work-style reforms), and the line with the shift toward cashless payments, growth in Business Process Outsourcing (BPO; handles In the Information Innovation business, sales and profits increased on greater demand for smart cards in Operating Income (right) Sales (left) Results Trends (Unit: ¥ billions) FY2019 FY2018 FY2017 1,000 800 400 【Information Communication】 200 0 50 40 30 20 10 0 30.4 24.8 21.8 773.1 762.3 778.6 Segment Earnings

5 300 1. Overview of Consolidated Results for Fiscal Year 2019: sheets also increased. While segment sales declined, profits rose, due partly to lower raw material prices. ion batteries rose sharply, and sales of photovoltaic module components such as encapsulants and back Packaging business. In the Industrial Supplies business sales of battery pouches used in automotive lithium- DNP implemented restructuring throughout the segment and reviewed low-value added products in the Operatng Income (right) Sales (left) Results Trends (Unit: ¥ billions) FY2019 FY2018 FY2017 500 400 200 【Lifestyle and Industrial Supplies】 100 0 25 20 15 10 5 0 11.1 8.4 12.1 391.4 397.2 394.3 Segment Earnings

6 150 1. Overview of Consolidated Results for Fiscal Year 2019: in semiconductor market conditions. As a result, overall segment sales and profits declined. for LCD displays. In the Electronic Devices business, semiconductor photomask sales decreased due to a decline for optical film for LCD TVs. DNP also reviewed its business structure in line with lower demand for color filters Sales increased for optical films and metal masks for organic light-emitting diode (OLED) displays, but declined Operating Income (right) Sales (left) Results Trends (Unit: ¥ billions) FY2019 FY2018 FY2017 250 200 100 【Electronics】 50 0 100 80 60 40 20 0 34.1 36.9 34.1 186.7 192.4 188.8 Segment Earnings

7 8 1. Overview of Consolidated Results for Fiscal Year 2019: Operating Inome (right) Sales (left) Results Trends (Unit: ¥ billions) FY2019 FY2018 FY2017 80 60 40 20 0 6 【Beverages】 4 2 0 2.0 2.1 2.2 55.3 56.0 56.1 regions declined due to adverse weather in Honshu. As a result, overall segment sales and profits declined. customers via the release of new products and proactive sales promotion activities, but sales to bottlers in other Sales to customers in Hokkaido rose due to efforts to increase share in existing markets and acquire new Segment Earnings

49.8 existing prices material Raw growth business Priority reforms structure Cost businesses Decline in 56.2 Analysis of Factors Affecting Operating Income 1. Overview of Consolidated Results for Fiscal Year 2019: 8 FY2019 FY2018 （Unit: ¥ billions) ▲1.5 +1.1 4.9 +12.3 ▲10.4 Forex

9 2. Impact of COVID-19 on DNP’s businesses (1) ２０１９年 a consequent increase in sales of e-books and home study materials at suburban bookstores in the (BPO) are also increasing as a means of handling corporate business continuity planning (BCP). marketing and settlement-related services, and enquiries regarding business process outsourcing other advertising demand. postponement of the Tokyo Olympics and Paralympics) and a decline in promotional campaigns and destinations. photographs, has been affected by the curtailment of operations at global theme parks and tourist ＜Imaging Communication Business＞ ＜Information Innovation Business＞ ＜Publishing Business＞ “honto” business.  The pandemic has resulted in the cancellation of events throughout Japan (including the  There are prospects for an increase in online sales and other usage to increase demand for digital  The “experience-based value creation” business, which aims to enhance people’s experiences through  Sales have fallen sharply due to the voluntary closure of some bookstores in business districts.  Government stay-at-home requests and school closures have resulted in more time spent indoors and

10 ＜Living Spaces Business＞ ＜Industrial Supplies Business＞ to the global suspension of operations in the automobile industry. increase due to an increase in working from home and online consumer spending. remodeling projects in Japan. ＜Packaging Business＞ as consumers remain at home. food items. 2. Impact of COVID-19 on DNP’s businesses (2) ２０１９年  Sales of commercial packaging materials for beverages, souvenirs, and restaurant use have declined  Demand has increased for packaging for pharmaceuticals and sanitary materials and for household  The business has been affected by an increase in delays or cancellations to housing construction and  There are concerns about a decline in demand for products such as interior decorative materials due  Demand for battery pouches for lithium-ion batteries used in tablets and smartphones is set to

11 ＜Display Components Business＞ hours, and demand is increasing for metal masks used in the production of OLED displays as client companies move to secure material supplies. there are prospects for demand growth driven by broader uptake of 5G and IoT due to factors such as an increase in working from home. ＜ Electronic Devices Business＞ 2. Impact of COVID-19 on DNP’s businesses (3)  A shift from LCD to OLED displays is progressing despite client companies’ move to reduce operating  In the Electronic Devices business, the outlook for semiconductor market conditions is uncertain, but

12 ＜Beverages＞ remain at home, there are prospects for an increase in sales of the new Lemondo range of alcoholic beverages due to greater demand from consumers drinking at home. 2. Impact of COVID-19 on DNP’s businesses (4)  Despite the impact of a decline in demand from tourism destinations and restaurants as consumers

13 ２．Medium-Term Management Plan Note: This plan does not currently factor in the impact of COVID-19.

14 （1） What the DNP Group Aims To Be

What the DNP Group Aims To Be (2) P&I innovations Reinforcing business base (3) Strengthening financial base (4) Strengthening non-financial capital (1) Social issues and Business people’s expectations Today's Innovation is "Tomorrow's Basic." 【DNP’s unvarying strengths】 “Culture of continual innovation” “Drive to create value that resolves social issues” “Synergies from P&I strengths” “Sincerity and transparency” promotion DNP The DNP Group connects individuals and society, and provides new value. customized solutions Corporate Philosophy Second Corporate Founding Toward “Third Corporate Founding” ＜DNP thus far＞ Provides tailored to ALL customer needs ＜DNP from now on＞ Resolving social issues and providing new value that meets people’s expectations 15

16 Seeds of value ALL DNP: Leveraging our comprehensive strengths that resolves social issues and providing new value for responding to people’s expectations Profits in return 4. Earnings model 3. Delivery method 2. Value proposition 1. Customer Ability to test: Verify hypotheses Business hypothesis Ability to change: Ability to discover: Value Creation Program = × (barometer of value) Price paid for value Profits from products and services Method for realizing value model Business of products and services Potential value hypothesis Value (Combining P&I strengths leveraging marketing perspective × partner alliances)

17 （２）Medium-Term Management Plan FY2020-2022 Action Program １．Basic strategy ２．Business conditions and key issues ３．Main initiatives ４．Management targets

18 １．Basic strategy ALL DNP Basic Strategy １ Create value through “P&I Innovations” ～Build a strong business portfolio～ Strengthen business infrastructure to support growth Basic Strategy ２