Q2 2016
Analyst Meeting Material
Results of the First Six Months of the Fiscal Year Ending December 31, 2016
August 5, 2016
Table of Contents
Q2 2016 Financial Summary P3
Earnings Forecast for FY2016 P17
Progress of Medium-Term Management Plan, T-2018 P22
Q2 2016 Financial Summary
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Topics
Topics in the First Six Months of FY2016
Business environment - Structural slump continued in each segment originated from China factors Carbon Black: Oversupply continued, despite moves to restore prices by Chinese manufacturers
Graphite Electrodes: Market slump continued on a global basis, despite curtailment of production capacity by large manufacturers
Fine Carbon: Sluggish due to delays in recovery of demand for LEDs and solar power industry
Operating trends
Sales: Down 17% year on year due to lower sales prices in key business segments (Carbon Black, Graphite Electrodes, Fine Carbon)
Operating income: Earnings dropped significantly year on year, resulting in an operating loss of ¥80 million, mainly due to the impact of measures to reduce inventories, temporary provision of allowance for doubtful accounts, and recording of research and development expenses, etc. on top of falls in sales prices
Extraordinary losses: Impairment loss of ¥6.5 billion was recorded, mainly due to a reduction of production capacity in the Fine Carbon segment and a closure of one line of facilities at Tokai Carbon (Tianjin) Co., Ltd., resulting in a net loss of ¥5.9 billion
Progress of Medium-Term Management Plan, T-2018
Phase 1 (2016) is considered to be a year of structural reforms to focus on optimizing businesses of the Group
Carried out as planned: reduction of production capacity in the Fine Carbon business, optimization of carbon black production facilities in line with market conditions, reduction of inventories, etc.
This Phase 1 is a stage of building a platform for Phase 2, which will be the growth stage starting 2017
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Tokai Carbon Co. Ltd. published this content on 17 August 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 17 August 2016 07:45:05 UTC.
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Tokai Carbon Co., Ltd. is one of the Japanese leaders in manufacturing and marketing of coal and graphite products. The group is also producing industrial furnaces. Net sales break down by family of products as follows:
- coal and graphite products (69.6%): coal, graphite electrodes, special graphite and friction materials primarily for industrial, electronic, energy, automotive and mechanic applications;
- cathodes for smelting aluminum and furnace linings (18.1%);
- industrial furnaces and heating products (6.9%): for thermal processing of ceramic products, electronic components, metals, glasses, etc.;
- other (5.4%).
Net sales break down geographically as follows: Japan (24.6%), Asia (26.7%), the United States (26.5%), Europe (11.6%) and other (10.6%).
TOKAI CARBON CO., LTD. 
