ANNUAL REPORT 2017 - 日本板硝子株式会社

1 ANNUAL REPORT 2017 FISCAL YEAR ENDED 31 MARCH 2017 MAKING A DIFFERENCE TO OUR WORLD THROUGH GLASS TECHNOLOGY NSG GROUP ANNUAL REPORT 2017 Our Vision Making a Difference to our World through Glass Technology Our Mission To be the global leader in innovative high-performance glass and glazing solutions, contributing to the conservation and generation of energy, working safely and ethically Our ValuesPeople are our most important asset. We value: Trust and mutual respect Integrity and professionalism Teamwork and mutual support Open communication Initiative and creativity Passion and resilience Individual and social responsibility SustainabilityOur Guiding PrinciplesWe will achieve success by.

2 Ensuring that all our actions add value and make our company sustainable Being obsessed with safety, in the belief that all accidents are preventable Following the highest standards of social and environmental responsibility in everything we do Developing the potential, motivation and commitment of every individual Achieving defined quality standards to satisfy all our customers Staying ahead by constantly developing advanced technologies, innovative products and applications Making decisions based on data, facts and analysis, working closely with operations, development and commercial teams Exploiting synergies and eliminating waste.

3 To ensure competitiveness Striving for continuous improvement - in all our activities NSG Group ANNUAL REPORT 2017 01 CONTENTSO verviewFinancial highlights 01 Business overview 02 NSG GROUP Corporate history 04To our shareholders 06 Long-term Strategic Vision and Medium-term Plan Phase 2 09 Our businessReview of business 12 Financial performanceChief Financial Officer s review and financial summary 14 Corporate information Board of Directors and Executive Officers 16 Corporate data 85 Further information 85 Financial statementsAdditional information 17 Independent auditor s REPORT 20 Financial statements 21 FINANCIAL HIGHLIGHTSR evenueMillions of yen580,795FY2016: 629,172 Total assetsMillions of yen790,192FY2016: 812,120 Profit/(loss) before taxationMillions of yen14,751FY2016: (37,439)Trading profit*Millions of yen33,062FY2016: 27,175 Number of employeesPermanent26,950FY2016: 27,463 Profit/(loss) attribute to owners of the parentMillions of yen5,605FY2016.

4 (49,838)*Operating profit before the amortization of intangible assets arising on the acquisition of Pilkington plc02 NSG Group ANNUAL REPORT 2017 BUSINESS OVERVIEWWE OPERATE THREE BUSINESS LINES: ARCHITECTURAL, AUTOMOTIVE AND TECHNICAL outlineExternal revenueArchitecturalA leader in architectural glazing and glass for solar energy productsTechnical GlassWorld leader in thin display glass and optical devices for office machineryOther ManufacturingGlass for architectural and solar energy applicationsOverall, the Group manages 26 float lines around the world.

5 (Note: Some of them are dedicated to Automotive and Technical Glass production) Global spreadMajor presence in Europe and Japan. Also in North America, South America and South East Asia ManufacturingSupplying the world s leading vehicle manufacturersPrincipal fabrication facilities in 14 countries. Major presence in Europe, Japan, North America and South America Global spreadLeading share of the global original equipment (OE) and specialized transport markets. Largest player globally in automotive aftermarket (AGR) glazing distribution and wholesale ManufacturingProducing the world s thinnest float glassMajor fabrication facilities in Japan, China and Europe Global spreadWorld leader in thin display glass and optical devices for office machinery and glass fiber for battery separators and timing beltsThis segment covers corporate costs, consolidation adjustments.

6 Certain small businesses not included in the segments covered above and the amortization of other intangible assets related to the acquisition of Pilkington to Group revenue51%Contribution to Group revenue8%Contribution to Group revenue<1%Contribution to Group revenueArchitectural Europe 14%Architectural Rest of World 9%Architectural North America 6%Architectural Japan 12%Automotive North America 14%Automotive Europe 22%Automotive Japan 10%Automotive Rest of World 5%Technical 8%31 Caroline St N, Waterloo, ON N2L 6B9, CanadaPilkington Eclipse GoldPhoto Credit.

7 TOYOTA MOTOR CORPORATIONSGP (Super Glass Paper)AutomotiveLeading supplier of glass to original equipment (OE) and automotive glass replacement (AGR) marketOverviewOur businessFinancial performanceCorporate informationFinancial statements NSG Group ANNUAL REPORT 2017 03 Revenues by region and by sectorFinancial highlights by businessMillions of yen20172016 Revenue237,722262,559 Operating profit*27,04424,560 Net trading assets131,595148,164 Capital expenditure11,58513,156*Before exceptional itemsMillions of yen20172016 Revenue296,560316,327 Operating profit*12,6549,813 Net trading assets137,393155,754 Capital expenditure13,31613.

8 272*Before exceptional itemsMillions of yen20172016 Revenue46,08849,490 Operating profit*1,756267 Net trading assets39,56144,428 Capital expenditure1,6641,452*Before exceptional itemsMillions of yen20172016 Revenue425796 Operating costs*(11,592)(15,278)Net trading assets2,6542,786 Capital expenditure1,448312*Before exceptional items Revenue by regionFY 2017 Revenue by regionFY 2017 Revenue by sectorFY 2017 Rest of World22%Europe35%Japan 28%North America15%Europe44% Japan 19%Rest of World10%North America27%Other 10%Thin glass for displays and lenses 40%Glass cord and ne glass products50%19101920193019401950196019701 98019902000201004 NSG Group ANNUAL REPORT 2017 NSG GROUP CORPORATE HISTORY(Nippon Sheet Glass Co.)

9 , Ltd.)Since the foundation of Nippon Sheet Glass Co., Ltd. in 1918, the NSG Group has continued to evolve. While sharing the 400-year-old Sumitomo Spirit, we are operating in markets around the world where our products have established a major presence in architectural, automotive and technical glass Plant in Fukuoka, JapanFirst piece of float glass ever made in AsiaMaizuru Plant in Kyoto, Japan1918 America Japan Sheet Glass Co., Ltd. was established in Osaka, glass production begun in Fukuoka, Company name was changed to Nippon Sheet Glass Co.

10 , Company started the first float glass production in Asia, with the technology licensed from Pilkington. (Inventor of float process)1950 The Company listed its shares on the Tokyo and other stock exchanges in expanded in line with domestic glass demand growth. New capacity added at the Kitakyushu plant in 1920s. A new plant was built in Yokkaichi, Mie, in Company increased the production capacity and capability in the context of economic development. The Company also made a full-scale inroad into the automotive glass business in 1950s.