CEO Message for Investors

On behalf of the NSG Group, I sincerely thank you for your continued support.

In keeping with our corporate vision of “Making a Difference to our World through Glass Technology,” the NSG Group aims to be a company that contributes to realizing a sustainable society by providing a variety of value-added (VA) products in our Architectural, Automotive and Technical glass businesses that help mitigate the impact of climate change and enhance people's safety and comfort in our living spaces.

Furthermore, in adhering to our principles of “People are our most important asset,” we are making efforts to be recognized as the best company not only by our employees, but also by other stakeholders including customers, shareholders, suppliers and local communities.

Summary of the financial year to 31 March 2018

Thanks to robust market environment in architectural and automotive glass businesses, productivity improvement, progress in VA shift, sales volume increase in technical glass business and cost improvement in display business in the period, our revenue increased by 4.0 percent from the previous year to ¥603.9 billion while operating profit increased by 19.4 percent to ¥35.7 billion, resulting in constant increase for five consecutive years. Profit before taxation significantly increased by 50.3 percent to ¥22.2 billion enabling us to make profit consecutively for two years as well as earning growth. By means of our continuous efforts in cost cutting, restructuring and other measures, and also supported by a brisk market condition, we were able to improve our financial condition to such level as enabling us to generate profits and cash flow in a stable manner.

In view of the above, our Board of Directors resolved to distribute dividends for the first time since that declared in relation to FY2012.We have made it the basic policy to declare the dividends in a stable manner on the basis of our sustainable business performance, and once and after all Class A Shares have been redeemed and cancelled, while we maintain this basic policy in all respects, we will continue to use the sincere efforts to declare dividends with introduction of consolidated dividend payout ratio of 30 percent as a guide.

Progress of MTP Phase 2

We made a good start for first year of MTP Phase 2. Aiming for “achieving financial sustainability” as one of our principal targets, we succeeded in generating free cash flow of ¥16.8 billion while carrying out reduction of net debt and financial expenses. Net equity ratio has steadily improved to 17.0 percent. Regarding another principal target, “to start transforming into VA Glass Company” (*1), we have increased VA product sales through diverse initiatives and introduction of new product lines such as launch of Super Spacia™ with higher insulation performance and Advanced Press Bending Line for manufacturing automotive glass in Japan and the United States. Our VA sales ratio, one of KPIs for MTP Phase 2, has improved to as high as 44 percent with the return on sales (*2) of 6.2 percent. They're showing satisfactory progress in MTP Phase 2.

On and after the next term as well, we will continue to make every effort to execute our four key measures under MTP Phase 2 (*3) with and on the strength of expected stability in global architectural and automotive glass markets. Furthermore, we will be creating “Business Innovation Center (BIC)” as an internal organization unit in charge of and addressing the growth strategy of the Group in order to realize sustainable growth. The BIC is designed to accelerate expansion of new business and creation of new customer value.

(*1) VA is an abbreviation of Value-Added in English.
(*2) This is calculated on the basis of trading profit before exceptional items and amortization.
(*3) Four key measures under MTP Phase 2: “Drive VA No.1 strategy,” “Establish growth drivers,” “Business culture innovation” and “Enhance global management.”

Our commitment for realizing sustainable growth for society

Now our society faces various global challenges. Under such circumstances, the Group has actively undertaken the actions leading to reduction of CO2 emission and industrial waste discharged from our manufacturing processes. In this connection we are simultaneously confident that we can make great contribution through our VA products and technologies to such social issues including the reduction of greenhouse gas emission and alleviating impact on climate change.

Our architectural glass strategic business unit, for instance, boasts of the alley of the products such as glass for use in photovoltaic contributing to energy generation or Low-E glass, vacuum insulated glazings (Spacia™) and fire protection glass, all contributing to substantial energy savings; our automotive glass strategic business unit boasts of light weight laminated glass and solar control glass, which enables reduction of CO2 emission and improvement on energy efficiency for automotives, windshields with high surface precision for head-up display and acoustic control glass to make contribution to safe and comfortable mobility; our technical glass strategic business unit has battery separator and glass cord to enhance the automotive energy efficiency, and Selfoc™ lens to make contribution of downsizing and weight saving of electronics devices such as printers. By means of offering these VA products, the Group aims for resolving wide range of environmental challenges, realizing a safe and comfortable society and further expansion of our business opportunity and our business growth.

In April 2018, the Group has entered into a long-term coated glass supply agreement with First Solar (USA), a leading photovoltaic solution provider and then decided to increase its glass production capacity in the United States and Vietnam accordingly. We have been maintaining a good relationship with First Solar as an important customer and a business partner of the Group over many years. We believe this decision will significantly contribute to enhanced growth of the Group during and after MTP Phase 2.

Last but not least

NSG has been able to continue business for as long as 100 years thanks to the support from shareholders and other stakeholders, and will celebrate 100th anniversary on 22 November 2018. Let our directors, officers and employees altogether extend our sincere gratitude to your support. Everyone in the Company will be united in an effort to boost our corporate value so that we can successfully evolve as a company with sustainable growth for another 100 years.

We look forward to your continuing understanding and support to the Group.


Shigeki Mori
Representative Executive Officer
President and CEO
Nippon Sheet Glass Co., Ltd.