To Our Shareholders and Investors

I'd like to begin by expressing my gratitude for your continued support of IBIDEN Co., Ltd. and the IBIDEN Group.

Performance Review

In Electronics Operation, although PC market, Package substrates' key market, continued to decelerate, the demands for servers, which is used for data center expanded due to increasing data throughputs with progress of ICT. Moreover, smartphone market which is key market of CSP and Printed Wiring Board was flat from a year ago. As a result, our Electronics Operation increased both in sales and profits compared with the previous consolidated fiscal year. In Ceramics Operation, DPF Unit decreased both in sales and profits. The reasons are followings: further reduction of diesel car sales in automobile market in developed countries, DPF's key market, and cost for launching new products to deal with new environmental regulation in Europe. Furthermore, AFP Unit tried to expand sales in emerging nations so that the sales increased. As a result, our Ceramics Operation decreased both in sales and profits compared with the previous consolidated fiscal year. In Construction and Other Operations, large construction diminished. As a result, our Construction and Other Operations increased in sales and decreased in profits although Electric Facility Unit and Environmental Analysis Unit steadily received orders.

Future Forecast

In Electronics Operation, we predict that existing PC and smartphone market will decelerate its growth. However, we also expect that data center market will continue strong growth. In addition, we anticipate that demands of more advanced and fine electronics substrates rise due to further development of ICT by 5G and expansion of AI and onboard equipment market. We'd like to work on expanding orders in new markets by increasing our market shares in cutting-edge areas, in which IBIDEN has excelled, all with the aim of improving our bottom line, and surely launching the large-scale capital investment for IC package substrates, which was decided in 2018. At the same time, we advance selectin and concentration strategy to production system and products in order to respond to market changes. In Ceramics Operation, our main business DPF Unit is predicted to continue diversification of powertrains such as the reduction of the diesel passenger vehicle market and development of electric-powered vehicles primarily in passenger vehicle market in developed countries. On the other hand, it is expected that demands in large-size vehicles market in emerging nations will expand by tighter exhaust gas regulation. We will invest resources in markets which further will develop and make proposals of new products for gasoline-powered vehicle and hybrid vehicle to customers positively. In Construction and Other Operations, we expand businesses with products which has unique competitiveness of each affiliates in Japan and make it sure that the businesses are stable revenue sources for us by power generation business.

Initiatives Aimed at Sustainable Growth

For supporting our sustainable growth over the medium- to long-term, we are developing new products for new markets and purpose in order to create new business following Electronics Operation, Ceramics Operation, and Construction and Other Operations by advance in core technology and making active use of open innovation based in four R&D centers.

All of us at IBIDEN will work together to achieve the medium-term management plan, while our operating environment is expected to remain highly challenging and uncertain.

We appreciate your continuous support for the Group.

President & CEO
Takeshi aoki