Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 4
Business summary
ALCONIX is a trading company group with comprehensive operations that encompass everything from the distribution and sale of non‐ferrous metals to the manufacture of metal products.
Business range
Non‐ferrous metals(metals other than steel)Non‐ferrous metals(metals other than steel)
Non‐ferrous metals(metals other than steel) 5‐6% 1.61.65‐6%
Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 5
Three main characteristics of the ALCONIX Group Business summary
14 M&As
30 business investments
Business expansion through M&A and business investments
11 overseas sites, 16 locations
Firm, close tie‐up overseas network
UniqueBusiness mix
Trading
Manufacturing
Electronic and advanced materials
Aluminum and copper products
Metal processing
Equipment and materials
Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 6
Trading/Electronic and advanced materials, Aluminum and copper products Business summary
Businesses Our trading products End products Main business areas
Electronic and advanced materialsJapan, North America, Europe, China, Asia
Consolidated subsidiaries
ADVANCED MATERIAL JAPAN CORPORATION,etc.
Aluminum and copper productsMain business
areas
Japan, China, Asia, Europe, Latin America
Consolidated subsidiaries
ALCONIX SANSHINHAYASHI METALALCONIX•MITAKA HEIWA KINZOKU
Titanium coils
Automobiles (magnetic and battery materials for various
motors)
Tablet PCs, smartphones
(battery materials, etc.)
Titanium products (heat exchangers)
Titanium sponge Rare earth strips
Rare earth ingots Rare earth compounds
Aluminum alloy ingots
Metal scraps
Aluminum coils Copper productsAircrafts
(used in structural parts )
Automobiles (bodies)
Motorcycles (aluminum frames, etc.)
Air conditioners (copper tubes)
Lead frames(for semiconductor) Aluminum cansBrass copper rod
Wind power generation (turbines)
Window materials(coating agents)
LCD panels
Compound semiconductors
and other electronic materials
Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 7
Manufacturing/Metal processing, Equipment and materials Business summary
Businesses Our trading products End products Main business areas
Metal processing
Japan, China, Asia
Consolidated subsidiaries
OHKAWA CORP.OHBA SEIKEN CO., LTD.
Equipment and materialsMain business
areas
Japan, China, North America, Europe, Asia
Consolidated subsidiaries
UNIVERETICALTOKAI YOGYOMARKTEC
Precision fabricated parts Artificial satellite (communication
parts)
Precision grinding processing parts
Aircrafts(engine parts)
Chip mounters
Tablet PCs, smartphones
(PWBs)
Plating materials
Welding rods
Non‐destructive testing (equipment)
Non‐destructive testing (detection materials)
Vehicle (plating, metal mold
building‐up welding rods, non‐destructive testing) Steel (marking)
Semiconductor (PWB plating)
Construction materials(plating)
Automobiles (driving parts, trial parts)
Power generation plant(non‐destructive testing)
Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 8
Expansion through M&As and business investments Business summary
■M&A (acquisition of stock) ■M&A (acquisition of business)
■ Business investment (equity‐method affiliates)
TOKAI YOGYO CO., LTD.HEIWA KINZOKU CO., LTD.
Inada Copper CenterK’MAC Co., Ltd.
OHBA SEIKEN CO., LTD. ALUMINUM & COPPER RECYCLING CENTER CORPORATION
UNIVERTICAL CORPORATION (UHI)Shanghai Longyang Precise Compound Copper Tube Co., Ltd.Hangji Chuangfu (Foshan) Metal Product Co., Ltd.
ALCONIX・MITAKA CORP.
OHKAWA CORP.HAYASHI METAL CORP.
Goko Shizai Co., Ltd. (ALCONIX SANSHIN CORPORATION)
Non‐ferrous materials business (Sojitz Metals Co., Ltd.)
Listed on JASDAQ
Listed on Tokyo Stock Exchange, Second section
Listed on Tokyo Stock Exchange, First section
Established Nissho Iwai Non‐Ferrous Metals Corp. Changed company name to Nissho Iwai Alconix Corporation
Management buy‐out –beginning of our second stage of growth
Changed company name to ALCONIX CORPORATION
Overseas network expansion
Singapore AMJ
Taiwan
Relocated thehead office
USA, China, Hong Kong and Thailand
Germany
Malaysia
Thailand ALCONIX LOGISTICS
Domestic sales of copper tubes(Sanshin Rinkei, now ALCONIX SANSHIN)AMJ (minor metal, rare earth)
MARKTEC CORPORATION
Company’s Growth
Business Expansion
Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 9
Solid overseas network 事業概要
The ALCONIX Group has a unique overseas network that emphasized profitability
● Overseas subsidiaries and liaison offices
(As of March 2016)
Business summary
11 overseas sites, 16 locations
Dusseldorf Moscow
Cairo
Vladivostok
Beijing
Shanghai Shenzhen
Guangzhou
Bangkok
Kuala Lumpur
Singapore
Taipei
Hong Kong
Hanoi
Chicago
Chicago, USA: ALCONIX USA., INC.Hong Kong, China: ALCONIX HONGKONG CORP., LTD.Bangkok, Thailand: ALCONIX (THAILAND) LTD.
ALCONIX LOGISTICS (THAILAND) LTD.Shanghai, China: ALCONIX (SHANGHAI) CORP.Beijing, China: ALCONIX (SHANGHAI) CORP., Beijing BranchShenzhen, China: ALCONIX (SHANGHAI) CORP., Shenzhen BranchGuangzhou, China: ALCONIX (SHANGHAI) CORP., Guangzhou BranchDusseldorf, Germany: ALCONIX EUROPE GMBHKuala Lumpur, Malaysia: ALCONIX (MALAYSIA) SDN. BHD.Taipei, Taiwan: ALCONIX (TAIWAN) CORPORATIONHanoi, Vietnam: ALCONIX VIETNAM CO.,LTD.
Moscow Liaison Office (Russia): ADVANCED MATERIAL JAPAN CORPORATIONVladivostok Liaison Office (Russia): ADVANCED MATERIAL JAPAN CORPORATIONADVANCED MATERIAL BEIJING CORPORATION (China): ADVANCED MATERIAL JAPAN CORPORATIONADVANCED MATERIAL TRADING PTE.LTD.(Singapore)
▲Overseas agents
Cairo, Egypt
Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 11
The integrated ALCONIX business model Business model
Operations that unify manufacturing and sales by using synergies from trading company and manufacturing capabilities
Changes in the external
environmentCustomers’ needs
Manufacturing and recycling(up‐stream activity)
Tradingcompany
(mid‐stream activity)
Wholesale(downstream
activity)
Logistics functions linking materials/non‐ferrous metal refiners with customers
Wholesale/retail functionsBusiness base: within Japan
Direct investment in manufacturersEstablish manufacturing company in joint venture
Business base:domestic/overseas
Business base:domestic/overseas/third‐party countries
Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 12
Business fields Business model
Ore Ingots Products
Trading segment
Manufacturing segm
ent
Base metals
Minor m
etals
Mining
entities (overseas)
ADVANCED MATERIAL JAPAN CORPORATION (AMJ)
(Consolidated subsidiary)
Major trading firms
Smelting
entities (dom
estic/overseas)
Raw resource‐
trading firms
Group companies of major general trading firms, independent and mid‐sized non‐ferrous trading firms, etc.
Product‐trading firms
Rolling, extrusion, reprocessing entities (dom
estic/overseas)
CompetitorsNon‐ferrous metal smelters' trading firms, group companies of major general trading firms, etc.
Metal processing
Equipment and m
aterials
Precision machining processing OHKAWA
Precision grinding processing
OHBA SEIKEN
Non‐destructive testing equipment and marking device manufacturing
MARKTEC
Plating material manufacturing UNIVERTICAL
Welding rods, thermal spraying TOKAI YOGYO
Electronics and advanced m
aterialsAlum
inum and
copper products
End productsEnd products
End user industriesAutomobiles Semiconductors
End user industriesAircrafts Semiconductors/IT
End productsEnd user industries
Automobiles
Consumer electronics
Semiconductors/IT
Aircrafts
Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 13
Business model ‐Features of trading capabilities and profit structure Business model
Business style Business flow Inventory Profitability Profit sourceWhen market prices rise
Amount of profit Profit margin
IntermediaryALCONIX concludes each contract with clients or supplier individuallyALCONIX facilitates and control distribution
No inventory
No inventory riskProfitability tends to be relatively high
Margin/ commission ○ (Eager to purchase) ○
Direct
Contract conditions (price, delivery date, amount) are concluded between our client and supplierSupplier deliver directly to our client
No inventory
No inventory riskProfitability tends to be low
Commission (fixed amount)Commission (transaction price x fixed rate)Commission (processing costs x fixed rate)
○(Eager to purchase)○(Eager to purchase)○(Eager to purchase)
Slightly○‐
Slightly△
Inventory‐1 (Already contracted)
ALCONIX takes an order from specific client, holds inventory and delivers just in time
Hold inventory
No inventory riskProfitability tends to be average
Margin/ commission ○(Eager to purchase) ‐
Inventory‐2 (No sales contract)
ALCONIX controls, and holds inventory regardless of any clients order
Hold inventory
Existence of inventory riskProfitability tends to be high
Margin ○(Eager to purchase) ○
○: Positive △: Nega ve ―: Neutral
Market price rise expansion of client demand; Market price drop restraint in client demand Relatively small impact of market volatility on our transactions Some "Intermediary" and "Inventory‐2" transactions are directly impacted by the market. "Inventory‐2" transactions account for only 5% of total transactions. This limits the direct impact of market volatility
on our profits.
Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 15
Consolidated financial summary Corporate data
FY3/06 FY3/07 FY3/08 FY3/09 FY3/10 FY3/11 FY3/12 FY3/13 FY3/14 FY3/15 FY3/16
Net sales 127,627 172,781 215,839 165,439 109,192 157,979 220,703 164,769 183,749 201,543 201,755
Cost of sales 122,968 166,668 208,571 159,582 103,259 149,710 210,060 156,010 172,754 189,452 189,574
Gross profit 4,659 6,112 7,268 5,857 5,932 8,268 10,642 8,759 10,995 12,091 12,181
SG&A expenses 3,175 3,631 4,195 4,212 4,395 5,191 5,955 5,473 7,510 7,506 8,388
Operating income 1,483 2,480 3,072 1,645 1,537 3,077 4,687 3,286 3,484 4,584 3,792
Ordinary income 1,214 1,910 2,452 1,577 1,402 2,963 4,499 2,892 3,600 5,205 4,281
Profit before income taxes 1,133 1,903 2,512 564 2,456 3,376 4,453 2,594 4,509 5,213 5,103
Profit 583 1,076 1,427 181 1,799 1,901 2,450 1,430 3,144 3,505 4,977
Total assets 36,660 49,973 54,290 39,137 40,219 64,561 68,600 70,382 85,664 89,848 111,072
Net assets 3,533 5,263 7,152 7,325 9,157 12,144 14,020 15,818 21,368 26,951 31,323
Interest‐bearing debt 7,562 10,520 14,505 13,175 11,915 25,345 23,148 26,926 29,913 30,130 38,611
(Unit: million yen)
Listed on JASDAQ
Listed on TSE 2nd Section
Designated for listing on TSE 1st Section
Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 16
Main financial indicators Corporate data
FY3/10FY3/11
(Listed on TSE 1st sec.)(stock split in Aug. *note 1)
FY3/12 FY3/13 FY3/14FY3/15
(stock split in Aug. *note 1)
FY3/16
Net assets per share (cons.) (Yen) 1,673.47 1,867.97 2,143.39 2,414.98 3,276.42 2,053.83 2,311.32
Net income per share (cons.) (Yen) 337.61 339.31 385.71 225.16 494.77 274.76 387.09
Dividend per share(of which commemorative dividend)
(of which interim dividend)
(Yen)85.00
(0.00)
50.00Note 2 (5.00)
(0.00)
60.00
(25.00)
60.00
(30.00)
65.00
(30.00)
40.00
(18.00)
44.00
(22)
Dividend payout ratio (%) 12.6% 14.7% 15.6% 26.6% 13.1% 14.6% 11.4%
Number of shares outstanding (Shares) 2,666,400 6,347,800 6,353,200 6,355,200 6,358,800 12,813,200 12,875,600
Return on equity (cons.) (%) 22.4% 18.3% 19.2% 9.9% 17.4% 14.9% 17.7%
Return on assets (cons.) (%) 3.5% 5.7% 6.8% 4.2% 4.6% 5.9% 4.3%
Equity ratio (cons.) (%) 22.2% 18.4% 19.8% 21.8% 24.3% 29.3% 26.8%
Net debt equity ratio (Times) 0.7 1.4 0.9 1.0 0.8 0.7 0.6
Number of employees (cons.) 361 402 411 511 752 797 1,132
Note 1: ALCONIX conducted a 2‐for‐1 stock split on August 1, 2010 and August 1, 2014. The net income per share in FY3/10 and FY3/15 were assumed that the stock split was previously conducted.
Note 2: ALCONIX paid a year‐end dividend for FY3/11 of 50 yen per share, consisting of its original 45 yen dividend plus five yen to commemorate its designation for listing on the First Section of the Tokyo Stock Exchange.
Net income per share: Not considered potential stock
Return on Asset = Ordinary income / (Average of year‐start and year‐end total assets of FY)
Return on Equity = Profit / (Average of year‐start and year‐end net assets of FY, excluding non‐controlling interests and subscription rights to share)
Net debt equity ratio = (Interest‐bearing debt ‐ Cash and deposits) / Net assets
Number of employees: Excludes directors of the Company and employees dispatched from temporary staff agencies, but includes seconded employees dispatched from the Company to other companies, contract staff, and staff dispatched from other companies. All figures are based on the securities report (“Yukashoken Hokokusho”)
Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 17
Percentage breakdown of ALCONIX Group transactions by product category Corporate data
* Based on results at the end of FY3/16 (value basis)
Non‐ferrous metal materials for automotive applications, metal silicon, magnesium, zinc, valve parts, piping joints, and construction materials
Plating materials, precision machining processing parts, precision grinding processing parts, welding rods, etc.
Aluminum
Copper
Of which nickel3.3%
Minor metalsTotal
Aluminum fins, aluminum foil, tubes, strips, sheets, can materials, aluminum alloy ingots, scraps, primary ingots,fabricated aluminum products, etc.
Copper products (tubes, sheets, strips), electrolytic copper, copper products for semiconductors, brass copper rod, copper scrap, electric wire, and other fabricated copper products
Nickel powder, nickel foam (battery materials), plating nickel ingot, etc.
Titanium, tungsten, molybdenum, rare earth, gallium, indium, cobalt, antimony, cadmium, barium, electronic materials, advanced materials
Industrial productsand others
Manufactured products
Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 19
Main shareholders Corporate data
Category Number of shares held
Shareholding ratios
Number of shareholders Composition
Financial institutions 3,458,700 26.87% 29 0.93%
Securities companies 323,463 2.51% 30 0.96%
Other Japanese entities 2,853,260 22.16% 63 2.01%
Overseas entities 2,705,764 21.01% 71 2.27%
Individual investors, others 3,534,000 27.45% 2,937 93.80%
Treasury shares 413 0.00% 1 0.03%
Total 12,875,600 100.00% 3,131 100.00%
(As of March 31, 2016)
Name of shareholders Number of shares held
Shareholding ratios
BBH FOR FIDELITY LOW‐PRICED STOCK FUND 1,151,200 8.94%
Japan Trustee Services Bank, Ltd. (Trust Account) 980,400 7.61%
Kobe Steel, Ltd. 853,600 6.63%
Mizuho Bank, Ltd. 396,000 3.08%
The Sumitomo Trust & Banking Co., Ltd. 372,000 2.89%
GOLDMAN SACHS INTERNATIONAL 350,907 2.73%
KITZ Corporation 281,200 2.18%
The Bank of Tokyo‐Mitsubishi UFJ, Ltd. 260,000 2.02%
BNY GCM CLIENT ACCOUNT JPRD AC ISG 229,493 1.78%
The Master Trust Bank of Japan, Ltd. (Trust Account) 209,100 1.62%
Others 7,791,700 60.52%
Total 12,875,600 100.00%
BBH FOR FIDELITYLOW‐PRICED STOCK FUND
8.94%
Japan Trustee Services Bank, Ltd. (Trust Account)
7.61%
Kobe Steel, Ltd.
6.63%Mizuho Bank, Ltd.
3.08%
The Sumitomo Trust & Banking
Co., Ltd.
2.89%
KITZ Corporation
2.18%The Bank of Tokyo‐Mitsubishi UFJ, Ltd.
2.02%
GOLDMAN SACHS INTERNATIONAL
2.73%
BNY GCM CLIENT ACCOUNT JPRD AC ISG
1.78%
The Master Trust Bank of Japan, Ltd. (Trust Account)
1.62%
Others
60.52%
(As of March 31, 2016)
Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 20
Shareholder returns: Trend in dividend per share and dividend payout ratio Corporate data
Total interim dividends (after the August 2014 stock split)Total year‐end dividends (after the August 2010 and August 2014 stock splits)
Dividend payout ratio (consolidated)
Increase of 5 yen due to stock split
Increase of 2 yen due to stock split
Increase of year‐end dividend by
4 yen(Yen)
FY3/06 FY3/07 FY3/08 FY3/09 FY3/10 FY3/11 FY3/12 FY3/13 FY3/14 FY3/15 FY3/16
Dividend payout ratio
(consolidated)
Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 21
Stock price indicator Corporate data
April 1, 2014 – March 31, 2016Stock price
Adjusted closing price (yen)
Stock split on August 1
Adjusted closing priceMarket cap(million yen)
June 12, 2015(Highest)2,193 yen
June 12, 2015Estimated PER: 5.9Estimate PBR: 1.0
Record high market capitalization: June 12(28,167 million yen)
Market capitalization (million yen)
2014Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
2015Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
2016Jan. Feb. Mar.
Closing stock prices adjusted for the August 1 stock split
Note: Market capitalization represents monthly average
Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 23
Non‐ferrous metal application 1 (smartphones)
Smartphone shipments are consistently high despite increasing competition as new companies emerge to compete with established manufacturers.
Market chart (reference materials)
【スマートフォン出荷台数(四半期ベース)】
データ出所:米調査会社IDC
PWB‐ Aluminum‐ Copper‐ Ceramic
LCD panel(Touch panel) ‐ Indium ‐ Tin‐ Copper ‐ Silicon
Vibrator‐ Neodymium ‐ Dysprosium‐ Iron ‐ Copper ‐ Tungsten
Camera‐ Copper ‐ Nickel ‐ Gold ‐ Lanthanum
Earphones AC Jack‐ Gold ‐ Nickel ‐ Neodymium ‐ Dysprosium
Body‐ Aluminum‐Magnesium‐ Antimony
IC‐ Gold ‐ Silver ‐ Copper ‐ Silicon ‐ Gallium
Condenser‐ Titanium ‐ Barium ‐ Copper ‐ Nickel ‐ Zirconium ‐ Tantalum ‐ SamariumChip resistors‐ Iron ‐ Silver ‐ Nickel ‐ Copper ‐ ZincQuartz crystal units‐ Silicon ‐ Copper ‐ Nickel ‐ Gold
Batteries‐ Lithium ‐ Nickel ‐ Cobalt ‐ Aluminum
Smartphone Shipments (Quarterly)(Million units)
GlobalFirm AFirm B
Source: IDC (US research company)
Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 24
Market chart (reference materials)Non‐ferrous metal application 2 (automobiles)
【国内販売台数、HV車割合】
データ出所:日本自動車部品協会
Motors for auto equipment(starter, power steering, power window, wiper, seat adjust, etc.)‐ Copper ‐ Neodymium‐ Barium ‐ Strontium
Driving motors(hybrid vehicle)‐ Neodymium‐ Dysprosium‐ Aluminum‐ Copper
Wheels‐ Aluminum‐Magnesium
Pipes‐ Copper
Exhaust emission control system (catalyst)‐ Platinum ‐ Rhodium‐ Palladium ‐ Lanthanum‐ Cerium
Body, interior, electriccomponents‐ Aluminum‐Molybdenum‐ Copper ‐ Antimony‐ Zinc
Car batteries (hybrid vehicle)‐ Nickel ‐ Cobalt‐ Lithium ‐ Lanthanum
【国内販売台数、HV車割合】Number of Domestic Sales; Share of HV
(Thousand units) Total four‐wheel vehicle sales Total HV sales Ratios
Source: Next Generation Vehicle Promotion Center
Engine room, radiator‐ Aluminum‐ Copper‐ Zinc
Copyright ©2016 ALCONIX CORPORATION All Rights Reserved 25
Non‐ferrous metal application 3 (aircraft)
Global private‐sector aircraft demand is forecast to double over the next 20 years.
航空機はアルミニウム、チタンを中心にレアメタル・レアアースを含む多くの非鉄金属が使用されている。
Market chart (reference materials)
Fuselage, wings, fin stabilizer (external panels and structural parts)‐ Aluminum alloy(Aluminum, copper, magnesium, lithium, etc.)(External panels and structural parts: More than 50% of aircraft)
‐ Stainless steel (chrome/nickel, used in structural parts)‐Magnesium, titanium (joints, bolts, connectors)‐ Nickel, zinc (fuselage plating)
EnginesEngines require many high‐performance non‐ferrous alloys in order to withstand temperatures that range from far below freezing to well over 1,000 degrees. ‐ Titanium alloys (fan, engine frame, case, blades, etc.)(Alloy with vanadium, molybdenum, zircon, etc.)
‐ Nickel alloys (turbine and especially the high‐temperature section after the compressor)(Alloy with chromium, tantalum, molybdenum, niobium, tungsten, etc.)
* Titanium and nickel account for more than 40% of materials used to make jet engines.
Landing gear (leg parts)‐ Nickel ‐ Chrome ‐Molybdenum* Landing gear parts, which require the greatest strength, use nickel‐chrome‐molybdenum steel.
Aircraft use many types of non‐ferrous metals, mainly aluminum and titanium, including minor metals and rare earths.
【地域別ジェット旅客機運航機数および需要予測】
データ出所:日本航空機開発協会
Passenger Jet Aircraft Worldwide and Projected Demand
Current no. of aircraftProjected future demand
Number of aircraft operating
End of 2013: 19,208
End of 2033: 36,769
Estimated increase 2014‐2033: 32,217
Source: Japan Aircraft Development Corporation
North America
Europe Asia/Pacific Middle East
Latin America
Africa
These materials were prepared to help investors understand ALCONIX and were not intended as a solicitation for investment in ALCONIX. These materials were prepared carefully for accuracy, but the completeness of these materials cannot be guaranteed. ALCONIX will not be held responsible for any problems or damages that result from the information provided in these materials. Earnings forecasts and other future forecasts in these materials were made based on the judgment of ALCONIX using information available at the time these materials were prepared. These forecasts embody latent risk and uncertainty. Please understand that actual earnings may differ from these forecasts due to changes in the business environment and other factors.
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