As of November 9, 2018

Information and Communication

In the security business, performance of IC cards was strong, but overall performance declined from the previous year as general securities decreased.

In the business form related business, business forms decreased from the previous year as a result of a decline in demand volume associated with digitalization, while BPO (Business Process Outsourcing) decreased significantly from the previous year due to downsizing of large projects and other factors. Data Print Service increased from the previous year due to strong performance in contracts for administrative notices mainly for financial institutions, despite the impact of a drop in volume and unit prices for some customers.

In the marketing business, POP decreased on a shift of corporate sales promotion methods, but BPO increased by incorporating the needs for greater business efficiency. Meanwhile, the Company has endeavored to create new services to meet demand for marketing that combines digital and analog technologies, such as developing a DM automatic shipping service linked with marketing automation. In addition, as part of initiatives for regional revitalization and establishment of Japan as a tourism destination, the Company expanded sales for solutions that improve the convenience and quality of travel, such as the text translation service “Japalingual,” the voice translation service “VoiceBiz,” and the virtual reality interactive tourism guide app “Street Museum.” Furthermore, the Company opened the collaborative base “NIPPON GALLERY TABIDO MARUNOUCHI,” aimed at creating new business and projects by collaboration between industry, government, and academia.

In the content business, magazines among other products declined from the previous year amid continued stagnation in the publications market. Meanwhile, in the continuously expanding e-book market, BookLive Co., Ltd. reinforced its customer base by advertising and other measures on a regular basis, so as to further enhance brand recognition.

As a result, net sales for the Information & Communication segment decreased by 3.0% from the same period of the previous year to ¥403.0 billion and operating profit decreased by 13.9% to ¥11.0 billion.

Living & Industry

In the packaging business, sales increased for flexible packaging materials from the previous year not only due to the impact of acquiring an Indonesia-based company in the ASEAN region, where demand is rising for packaging with outstanding performance, but also due to the increase in high value added packaging materials for medical care and medicine using the sophisticated quality control system and clean production environment at the Gunma Center Plant. Meanwhile, sales for paper containers such as those for beverages declined from the previous year, and the label business was sluggish. Furthermore, as market needs are diversifying against the backdrop of changes in the social environment such as an aging population and the social advancement of women, as well as social issues such as food loss, the Company has focused on developing new products that enhance its competitiveness, such as by developing the first food retort pouches in Japan that have a liquidrepellent function, realizing improvement in discharging efficiency and reduction in residue of products in retort pouches.

In the interior décor materials business, sales increased from the previous year owing to domestic growth in decorative paper/film, and overseas, the effect of integrating Decotec Printing S.A., a Spain-based interior décor printing manufacturer, which the Company acquired. The Company also made use of the “Smart NANO” technology, which realizes the world’s most advanced level of surface features in terms of resistance to scratches and contamination, to expand the lineup of products, such as by developing new decorative paper/film for fittings in addition to the conventional flooring.

In the Living & Industry segment, despite the impact of soaring raw materials prices among other factors, the Company is strengthening the revenue structure by implementing structural reforms in line with cost reductions and changes in the business environment, and is reallocating management resources by steadily implementing its growth strategy.

As a result, net sales for the Living & Industry segment increased by 2.7% from the same period of the previous year to ¥208.4 billion and operating profit decreased by 21.8% to ¥9.2 billion.

Electronics

In relation to displays, sales of color filters decreased from the previous year, as sales of small- to medium-sized color filters mainly for smartphones decreased. Sales of anti-reflection films increased from the previous year by incorporating high value added products for TVs. Sales of TFT LCDs declined due to intensifying competition following the rise of Chinese manufacturers affecting mainly consumer products.

In the semiconductor business, sales of photomasks were robust due to capturing demand for cutting-edge products as the semiconductor market expanded in respond to rising demand for AI and IoT. FC-BGA substrate, which is a high-density semiconductor package substrate, increased from the previous year as a result of capturing strong overseas demand for high value added products.

As a result, net sales for the Electronics segment decreased by 0.1% from the same period of the previous year to ¥96.4 billion and operating profit decreased by 4.8% to ¥6.4 billion.

Overview of performance by business segment