Consolidated Financial Statements Summary (For the year ended March 31, 2017) [Teijin] (PDF:948KB)

(For the year ended March 31, 2017)

English translation from the original Japanese-language document

(All financial information has been prepared in accordance with accounting principles generally accepted in Japan) May 9, 2017

Company name : TEIJIN LIMITED (Stock code 3401)

http://www.teijin.com

Contact person : Hiroki Sorate General Manager, IR Section, TEL: +81-(0)3-3506-4395

Finance & Investor Relations Department

1. Results of FY2016 (April 1, 2016 through March 31, 2017)

   (Amounts less than one million yen are omitted)

2. Consolidated financial results (Percentages are year-on-year changes)

   Period	Net sales	Operating income	Ordinary income	Profit attributable to owners of parent
   FY2016	Million yen %	Million yen %	Million yen %	Million yen %
   	741,291 -6.3	56,512 -15.8	55,933 -7.3	50,133 61.3
   FY2015	790,748 0.6	67,130 71.7	60,316 42.3	31,090 ―

   cf.Comprehensive income; For FY 2016 :46,282 million yen ( For FY2015: 15,799 million yen)

   Period	E.P.S. *1	Diluted E.P.S.	ROE *2	ROA *3	Ratio of operating income to net sales
   FY2016	Yen	Yen	%	%	%
   	254.91	231.09	15.7	6.3	7.6
   FY2015	158.15	143.42	10.6	7.3	8.5

   *1 E.P.S.: Earnings per share *2 ROE: Ratio of Profit (loss) attributable to owners of parent to Shareholders' equity *3 ROA: Ratio of Ordinary income to Total asset cf. Equity on gain and losses of unconsolidated subsidiaries and affiliates; For FY2016: 2,078 million yen (For FY2015: (2,943) million yen)

   (Notes) The Company consolidated its common shares at a ratio of five shares to one share on the effective date of October 1, 2016. Accordingly, the E.P.S. and the Diluted E.P.S. are calculated on the assumption that the consolidation of shares is conducted at the beginning of the preceding fiscal year.

3. Consolidated financial position

   Total assets	Net assets	Shareholders' equity ratio	Shareholders' equity per share
   As of March 31, 2017	Million yen	Million yen	%	Yen
   	964,053	351,829	35.1	1,720.13
   As of March 31, 2016	823,429	314,412	36.4	1,526.16

   cf. Shareholders' equity as of March 31, 2017 : 338,383 million yen (As of March 31, 2016: 300,112million yen)

   (Notes) The Shareholders' equity per share is calculated on the assumption that the consolidation of shares is conducted at the beginning of the preceding fiscal year.

4. Consolidated cash flows

5. Period	From operating activities	From investing activities	From financing activities	Cash & cash equivalents at end of period
   FY2016	Million yen	Million yen	Million yen	Million yen
   	79,040	(127,650)	63,765	117,549
   FY2015	80,640	(40,322)	(8,316)	100,955

6. Dividends

   	Dividends per share					Total dividends paid (Annual)	Payout ratio (Consolidated)	Dividend on equity ratio (Consolidated)
   Period	1Q	2Q	3Q	4Q	Annual
   FY2015	Yen	Yen	Yen	Yen	Yen	Million yen	%	%
   	―	3.00	―	4.00	7.00	6,881	22.1	2.3
   FY2016	―	5.00	―	30.00	―	10,818	21.6	3.4
   FY2017 (Outlook)	―	30.00	―	30.00	60.00	28.1

   (Notes) The amount of the year-end dividend per share for FY2016 reflects the impact of the consolidation of shares and disclosure of the annual dividend per share is omitted. The annual dividend per share converted on the basis after the consolidation of shares would be 35 yen for FY2015 and 55 yen for FY2016.

7. Forecast for operating results of FY2017 (April 1, 2017 through March 31, 2018)

   (Percentages are interim-on-interim and year-on-year changes)

   Period	Net sales	Operating income	Ordinary income ow	Profit attributable to ners of parent	E.P.S.
   FY2017 interim	Million yen %	Million yen %	Million yen %	Million yen %	Yen
   	415,000 17.5	30,000 11.1	31,000 16.2	23,000 7.6	116.95
   FY2017	855,000 15.3	62,000 9.7	63,000 12.6	42,000 -16.2	213.56

8. Other information

9. Changes in specific subsidiaries involving changes in the scope of consolidation: Yes New: Continental Structural Plastics Holdings Corporation

10. Shares issued (common stock)

11. Shares issued (including treasury stock) at end of term End of FY 2016 196,951,733

    End of FY 2015 196,951,733

    Treasury stock End of FY 2016	231,413
    End of FY 2015	306,114

    Average shares outstanding during the period FY 2016 196,668,286

    FY 2015 196,589,780

    (Notes) The Company consolidated its common shares at a ratio of five shares to one share on the effective date of October 1, 2016. Accordingly, theShares issued (including treasury stock) at end of term, the Treasury stock and the Average shares outstanding during the period are calculated on the assumption that the consolidation of shares is conducted at the beginning of the preceding fiscal year.

    Reference: Individual results of FY2016 (April 1, 2016 through March 31, 2017)

12. Individual financial results (Percentages are year-on-year changes)

    Net sales	Operating income	Ordinary income	Net income
    FY2016	Million yen %	Million yen %	Million yen %	Million yen %
    	130,682 -8.1	14,823 -13.9	24,633 -3.5	16,035 39.6
    FY2015	142,173 -2.8	17,207 56.9	25,532 22.5	11,490 ―

    E.P.S.	Diluted E.P.S.
    FY2016 FY2015	Yen 81.54 58.45	Yen 73.82 52.92

    (Notes) The E.P.S. and the Diluted E.P.S. are calculated on the assumption that the consolidation of shares is conducted at the beginning of the preceding fiscal year.

13. Individual financial position

Total assets	Net assets	Shareholders' equity ratio	Shareholders' equity per share
FY2016	Million yen	Million yen	%	Yen
	640,010	249,499	38.9	1,264.42
FY2015	534,202	238,023	44.4	1,206.53

cf. Shareholders' equity: 248,736 million yen (FY2015: 237,259 million yen)

(Notes) The Shareholders' equity per share is calculated on the assumption that the consolidation of shares is conducted at the beginning of the preceding fiscal year.

Appropriate Use of Forecasts and Other Information and Other Matters

All forecasts in this document are based on management's assumptions in light of information currently available and involve certain risks and uncertainties. Actual results to differ materially from these forecasts. For information on these forecasts, refer to "Outlook for FY 2017," beginning on page 8.

1. Qualitative Information and Financial Statements (1) Qualitative Information on Results of Operations
1. Analysis of Consolidated Results of Operations

   Global economic conditions in FY 2016, ended March 31, 2017, tracked a gradual expansionary path as a whole, as developed countries centered on the U.S. drove firm growth, and the People's Republic of China (PRC) economy turned upward from the second half of the fiscal year due to economic stimulus measures. Meanwhile, the Japanese economy saw signs of improvement, including an upturn in business confidence in the manufacturing industry due to a recovery in exports and other factors despite sluggish growth in personal consumption.

   In this environment, for FY 2016, consolidated net sales totaled ¥741.3 billion, a decrease of 6.3% year on year. This decrease was due in part to the impact of optimizing our production configuration associated with restructuring initiatives mainly in the resin business, in addition to the stronger yen in the first half of the fiscal year, although sales were generally steady across all businesses on the whole. Operating income decreased 15.8% to ¥56.5 billion, due in part to the impacts of foreign exchange movements, new drug licensing costs and downward revisions to NHI drug reimbursement prices, despite efforts to steadily expand the earnings base by driving growth in existing businesses and executing restructuring initiatives. Ordinary income decreased 7.3% to ¥55.9 billion.

   Profit attributable to owners of parent increased 61.3% to ¥50.1 billion, partly due to a large decrease in tax expense in conjunction with the adoption of tax effect accounting in connection with a decision to withdraw from the home healthcare business in the U.S. Earnings per share rose ¥96.77 to ¥254.91.

2. Business Segment Results Advanced Fibers and Composites

Sales in the Advanced Fibers and Composites segment totaled ¥136.8 billion, while operating income was ¥13.8 billion.

High-Performance Fibers

Sales remained firm for automotive applications.

In aramid fibers, sales of Twaron para-aramid fibers expanded firmly for automotive applications, including for tires in Europe. In contrast, sales for oil drilling and ballistic protection applications were weak. Sales were firm for Technora para-aramid fibers both for automotive applications in Japan and also for infrastructure-related applications overseas. Technora is being used in an expanding range of applications under more extreme conditions given the positive assessment of its outstanding fatigue resistance, chemical barrier and other properties.

Sales of Teijinconex meta-aramid fibers were robust for use in automotive applications such as turbocharger hoses, as well as protective clothing and industrial applications, despite persistently fierce competition in the growing market for filter applications. Moreover, at a new production facility in Thailand, where production and sales commenced in the previous fiscal year, we are focused on expanding this particular business in promising Asian markets and emerging markets, where high growth is expected against the backdrop of increasingly stringent regulations pertaining to flame-retardant materials and environmental safety.

In polyester fibers, solid sales were recorded for automotive applications, such as seat belts, conveyor belts and hose cords, and for use in personal hygiene products, wadding, and reverse osmosis membrane support layers for water treatment applications. Moreover, we are striving to further strengthen our competitiveness by realigning our domestic production configuration and by transferring production of certain items to subsidiaries in Thailand.

Carbon Fibers and Composites

Sales for use in aircraft grew steadily; U.S.-based Continental Structural Plastics acquired.

Sales of TENAX carbon fibers continued to grow steadily for use in aircraft. Among other applications, sales for wind power generation in the Americas and Europe were robust, but the supply-demand balance softened for general industrial use, and for sports and leisure applications in Asia. In addition, Pyromex Oxidized PAN fiber has continued to post steady sales, reflecting favorable demand for use in aircraft brake pads. In response, a carbon fiber production line is being converted into a Pyromex production line at Toho Tenax America, Inc.

We are working to expand business centered on composite materials in the field of high-performance materials to be used in mass-produced automotive components. As part of these efforts, in January 2017, we acquired Continental Structural Plastics Holdings Corporation (Headquarters: Michigan, U.S.A.; "CSP"), a global leader in automotive lightweight composite technologies. CSP became our wholly owned subsidiary. Going forward, we will integrate CSP's glass fiber reinforced plastic (GFRP) and our fiber reinforced plastic (FRP) technologies, specifically carbon fiber reinforced thermoplastic (CFRTP) and carbon fiber reinforced plastic (CFRP), along with driving growth of CSP's components business model in the Americas and global market expansion of this business model to Europe, Japan and Asia. Through this process, we will establish a strong business platform in automotive composite products and will seek to become a supplier of Tier 1 components in this business.

Furthermore, to address further growth in demand for carbon fiber primarily in North America, we have completed the acquisition of land in the U.S. and are considering the construction of a new carbon fiber plant.

In addition, we carried out a fuel conversion of in-house power generation equipment at the Mishima Factory, a key carbon fiber production site, by switching from steam turbine generation using heavy oil to gas turbine power generation, and commenced operation of the converted equipment. As a result, we will push ahead with the reduction of our environmental impact in conjunction with improving power generation efficiency.

Electronics Materials and Performance Polymer Products

The Electronics Materials and Performance Polymer Products segment reported sales of ¥134.4 billion and operating income of ¥18.5 billion.

Resin and Plastics Processing

Steady performance by polycarbonate resins, with a focus on further expanding high-performance applications.

Our mainstay Panlite and Multilon polycarbonate resin products saw firm supply-demand dynamics and maintained steady profitability, owing to high capacity utilization maintained at both production sites in the PRC and Japan, plus an improved sales mix, despite a reduction in profits due to the impact of foreign currency conversion reflecting the stronger yen. In this environment, we are taking initiatives to further expand high-performance applications. In the