1

1H FY2017 Financial Results(presentation material)

November 17, 2017

CMK CORPORATION

CMK CORPORATION

（Stock code：6958）

Contents

2

１．Consolidated financial results for

1H FY2017

２．Trends of Automotive PWB market and Sales performance of CMK

３． Supplementary material onfinancial results

１．Consolidated financial results for 1H FY2017

3

①Key points of 1H FY 2017 Financial results

4

Consolidated financial results for 1H FY2017

• Continued momentum in the increasing orders of our key products

for automotive use

• Sales increased and profitability improved simultaneously, reflecting the impact of production capacity enhancements and productivity improvements

37,148 35,785 39,584

41,981

884 860

1,791

2,136

0

1,000

2,000

3,000

0

10,000

20,000

30,000

40,000

50,000

2H FY 2015

Results

1H FY 2016

Results

2H FY 2016

Results

1H FY2017

Results

Opera

ting in

com

e (M

illions o

f Yen)

Sale

s (Millio

ns o

f Yen)

Sales Operating income

0

②Consolidated Income statement

5

Consolidated financial results for 1H FY2017

1H FY 2016Results

1H FY 2017Results

YoY

Change %

Net sales 35,785 41,981 +6,195 +17.3%

Operating income 860 2,136 +1,276 +148.4%

Operating margin 2.4% 5.1% +2.7%

Ordinary income 776 1,984 +1,207 +155.5%

Profit attributable to owners of parent

802 1,630 +827 +103.1%

Exchange rate(USD/JPY) 111.47 112.12 +0.65 +0.6%

（Millions of Yen）

Profits more than doubled compared with the previous fiscal year in all the profit related items

253

298

13

14

3

4

11

11

8

14

67

76

0 50 100 150 200 250 300 350 400 450

1H FY 2016

Results

1H FY 2017

Results

Car electronics

357

419

（Hundred Millions of Yen）

AV equipment Digital still cameraMobile communications Amusement Others

1H FY 2017Results

1H FY 2016Results

Car electronics

AV equipment Digital still cameraMobile communications Amusement Others

③Sales by application

6

Consolidated financial results for 1H FY2017

• Steady growth in sales of products for automotive use continued, driven by the progress of automotive electrification

• Among products for amusement use, sales for popular game equipment use increased

+18.1%

④Enhancing overseas production capability

Consolidated financial results for 1H FY2017

As we are continuously at full production capacity in all factories,further production capacity enhancement is under consideration

7

Thailand

China

CMK Corporation (THAILAND) co., ltd. (Double-sided PWBs, Multilayered PWBs, HDI PWBs)

・ Order intake mainly of products for automotive use remains strong

・ In the end of September, enhanced production capacity by 30% compared with the previous fiscal year(acceleration of the initial schedule)

CMK electronics (WUXI) co., ltd.(HDI PWBs）

・ HDI PWBs adopted in products for automotive use increased

・ In the end of June, enhanced production capacity by 30% compared with the previous fiscal year

CMKC (Dong Guan) ltd.(Double-sided PWBs, HDI PWBs）

・ The factory manufacturing products for automotive usebeing operated continuously at full capacity

235 256 260

6.3

8.9

12.7

0

3

6

9

12

15

18

0

50

100

150

200

250

300

1H FY 2016

Results

2H FY 2016

Results

1H FY 2017

Results

Opera

ting in

com

e

(Hundre

d M

illions o

f Yen)

Sale

s (Hundre

d M

illions o

f Yen)

Changes in Japan profit and loss

Net Sales Operating income

Operating margin

4.9％

⑤Improving domestic productivity

8

Consolidated financial results for 1H FY2017

• Domestic operating margin increased by1.4% as a result of our focus on productivity improvements mainly in Niigata factory

• Further improvement in profits expected in the second half

Operating margin

2.7％

Focus o

n im

pro

vin

g

pro

ductiv

ity

Dow

nsiz

ing o

f dom

estic

pro

ductio

n site

s

Operating margin

3.5％

⑥Analysis of changes in Operating income

9

Consolidated financial results for 1H FY2017

8.6

1.9

18.7

3.0 ▲10.9

21.3

1H FY 2016

Operating income

(Results)

1H FY 2017

Operating income

(Results)

Streamliningbusiness operations

Profit increasedue to sales growth

Improved yieldsIncreased productivity Decreased sales prices

Cost reduction etc.

On the momentum of continuing strong orders mainly of products for automotive use, financial results improved driven by profit growth through sales increase as a result of production capacity enhancements

（Hundred Millions of Yen）

⑦Forecast of Consolidated Income statement

10

Consolidated financial results for 1H FY2017

FY 2016Results

FY 2017Forecast

YoY

Change %

Net sales 75,370 80,000 +4,629 +6.1%

Operating income 2,652 4,000 +1,347 +50.8%

Operating margin 3.5% 5.0% +1.5%

Ordinary income 2,628 3,700 +1,071 +40.7%

Profit attributable to owners of parent

2,153 3,000 +846 +39.3%

Exchange rate(USD/JPY) 109.28 110.00 +0.72 +0.7%

（Millions of Yen）

２．Trends of Automotive PWB market and Sales performance of CMK

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1. Increase in the number of sales of new cars Strong sales of new cars continue globally

The car ownership rate in China and India where maintain high economic growth rates still remains at a low level and the markets are expected to grow further

2. Growing popularity of environment friendly next generation automobiles (PHV/EV etc.) This year, regulations for fuel efficiency and emission control of

automobiles are tightened in many countries around the world

Automakers have switched over to the development of next generation automobiles which are expected to become more popular rapidly in future

3. Widespread adoption of the Advanced Driving Assistance System (ADAS) Adaption of ADAS increased rapidly, driven by growing needs for active

safety and driving assistance

Japanese government sets a target to increase the adaption rate of Emergency Brake Assist into new cars up to 90% or more by 2020

①Trends of Automotive market

12

Trends of Automotive PWB market and Sales performance of CMK

More use of ECU to meet demand for environment friendly and highly functional automobiles

（ECU with an annual growth of 10% and over between 2015~2021）

②Progress of automotive electrification

13

Trends of Automotive PWB market and Sales performance of CMK

ADAS/Automatic operating system

Radar sensor

Car camera

Power Window smart motor

Driving Control and Safety ECUSmart sensor/Actuator

Battery monitoring

Hybrid control

DC-DC converter

Motor drive

Vehicle battery charger

Powertrain ECU

Idle reduction

DI engine

Power management

Head lamp

Body electronics ECUInformation and

Communication ECU

HV/PHV/EV/FCV ECU

IVI system

Telematics

※Source：prepared by CMK reference to Fuji Chimera Research [Comprehensive Study of In–Vehicle Electronic Devices & Components 2017]

The number of ECU embedded in automobiles increased dramatically, driven by widespread use of next generation automobiles and ADAS

③Change in the number of ECU used in automobiles

14

Trends of Automotive PWB market and Sales performance of CMK

※Source：prepared by CMK reference to Fuji Chimera Research [Present situation and future prospect of the automotive ECU market in 2014], [Comprehensive Study of In–Vehicle Electronic Devices & Components 2017]

The number of ECU embedded in automobiles increased ahead of the forecast in 2014, reflecting the accelerated progress of automotive electrification

20.2

22.7 21.6

30.4

0

5

10

15

20

25

30

35

2016 2017 2018 2020 2025

Num

ber o

f ECU

(unit)

Number of ECU per an automobile

As of 2014Prospect・Forecast

As of 2017Prospect・Forecast

+34%

④Scale of the automotive PWB market

15

Automotive PWB market is expected to grow surpassing the sales increase of new cars, driven by the progress of automotive electrification

101 90 860 1,167

3,404

4,664

460

720

0

2,000

4,000

6,000

8,000

2016

Prospect

2017

Forecast

2018

Forecast

2019

Forecast

2020

Forecast

2021

Forecast

2025

Long term

Forecast

Mark

et sc

ale

(Hundre

d M

illions o

f Yen)

Market scale forecast of rigid PWBs for automotive use

4,826

6,643

CAGR(‘21/’16)

Total6.6%

HDI9.4%

Multilayered6.5%

Double-sided6.3%

Single-sided▲2.3%

Trends of Automotive PWB market and Sales performance of CMK

※CAGR(Compound Average Growth Rate)※Source：prepared by CMK reference to Fuji Chimera Research [Comprehensive Study of In–Vehicle Electronic Devices &

Components 2017]

⑤Sales growth trend of our products forautomotive use

16

Our focus on products for automotive use in the current Medium-term management plan contributed to sales increase in products for automotive use, achieving an annual growth of around 10% on a local currency basis

Trends of Automotive PWB market and Sales performance of CMK

381 435 423 447

489 486 500 531

581

42%

50%53%

62%

69% 66%68%

71%73%

20%

40%

60%

80%

100%

200

400

600

FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

Sale

s ratio

of a

uto

motiv

e u

se

Sale

s (Hundre

d M

illions o

f Yen)

Our sales of automotive use

Sales of automotive use Sales ratio of automotive use

Focus on automotive use in the current Medium term management plan

【reference】1H

Results298

Plan

0 0%

⑥Applications of PWBs and CMK’s positioning

17

Our focus on potential market growth, added value to products and highly reliable business areas contributed to increase sales of PWBs for Powertrain/Driving Control and Safety, and HDI PWBs every year

Trends of Automotive PWB market and Sales performance of CMK

Require

d re

liability

Valu

e-a

dded P

roducts

Mark

et g

row

th

Single-sided Double-sided Multilayered HDI

Powertrain

Engine Management System, Inverter etc.

Driving Controland Safety

Brake Control System, Electric Stability Control, airbag, Millimeter-Wave Radar, Car camera, Tire Pressure Monitoring System etc.

Car navigation, View monitor,Intelligent Transport Systems etc.

Information and Communication

Body Electronics Climate Control

Headlamp, mater panel etc.

Air conditioner, Mirror Control, Power seat, Sunroof etc.

⑦Sales promotion for foreign customers

18

Trends of Automotive PWB market and Sales performance of CMK

• ‘Overseas sales expansion’ is set as one of our key strategies in the current Medium-term management plan to strengthen sales activity targeting foreign customers

【Progress status】

Orders of products for automotive use from major foreign customers increased steadily as originally planned

CMKC (Dong Guan) in China achieved more than doubled ratio of sales to foreign customers in the first half of this fiscal year compared with the previous fiscal year

CMK Thailand expects to increase sales to foreign customers significantly

CMK stays ahead of the competition in automotive PWB market by expanding sales to foreign customers as well as focusing on growing areas

３． Supplementary material onfinancial results

19

① Sales by application

20

Supplementary material on financial results

1H FY2016Results

1H FY2017Results

YoYChange

FY2017Forecast

Car electronics 253 298 +45 581

Mobile communications 13 14 +1 29

AV equipment 3 4 +0 15

Digital still camera 11 11 -0 20

Amusement 8 14 +5 21

Others 67 76 +8 130

Total 357 419 +61 800

（Hundred Millions of yen）

②Sales by type of PWBs

21

Supplementary material on financial results

1H FY2016Results

1H FY2017Results

YoYChange

FY2017Forecast

HDI PWBs 101 129 +27 235

Multilayered PWBs 152 177 +25 357

Double-sided PWBs 69 76 +6 129

Others 34 36 +2 76

Total 357 419 +61 800

（ Hundred Millions of yen ）

③ Financial results by region

22

Supplementary material on financial results

1H FY2016Results

1H FY2017Results

YoYChange

FY2017Forecast

SalesOperating

incomeSales

Operating income

SalesOperating

incomeSales

Operating income

Japan 235 6.3 260 12.7 +24 +6.4 493 19.9

China 104 3.0 141 6.3 +36 +3.2 277 16.8

Southeast Asia 78 1.3 99 2.2 +21 +0.8 210 6.7

Europe & North America

27 1.2 29 1.8 +2 +0.5 54 3.1

Total 446 12.0 531 23.1 +85 +11.1 1,034 46.7

Adjustment ▲88 ▲3.4 ▲111 ▲1.8 ▲23 +1.6 ▲234 ▲6.7

Consolidated 357 8.6 419 21.3 +61 +12.7 800 40.0

（ Hundred Millions of yen ）

④ Capital investment

23

Supplementary material on financial results

1H FY2016Results

1H FY2017Results

YoYChange

FY2017Forecast

Japan 13 7 -6 21

Overseas 10 33 +23 38

Consolidated 24 40 +16 60

Depreciation cost 21 19 -1 42

（ Hundred Millions of yen ）

24

END

Future-related information and descriptions in this material are just forward-looking statements and not guarantees for future achievements

(Amounts are rounded, and % is rounded to one decimal place.)