LINTEC ANNUAL REPORT 2017
For the iscal year ended March 31, 2017
Moving Forward
With a Focus on
The Future
This report is meant to help shareholders and other investors understand the LINTEC Group and its quest to achieve sustainable growth and contribute to the further development of society as a whole. Based on the International Integrated Reporting Framework released by the International Integrated Reporting Council in December 2013, in addition to performance and inancial information, this report also introduces the technological capabilities, human resources, and other
“intangible assets” accumulated by the LINTEC Group that are of the variety not listed in the inancial statements.
Information that could not be contained within this report is available on the following websites.
IR Website CSR Website
http://www.lintec-global.com/ir/ http://www.lintec-global.com/csr/
Editorial Policy
REPORTING PERIOD
This report covers the period from April 1, 2016 to March 31, 2017. However, some of the information includes content from April 2017 onward.
FORWARD-LOOKING STATEMENTS
This report includes forward-looking statements, such as forecasts of business results, based on information currently held and assumptions that have been judged as reasonable by the Company. The Company cannot guarantee the accuracy of these statements or deinitively assure the realization of future numerical targets and policies. Actual business results, etc., may vary due to various factors and circumstances.
Contents
1 To All Our Stakeholders 2 COVER STORY - 2 LINTEC’s History
- 4 LINTEC’s Distinct Features - 6 LINTEC’s Business Model
8 Performance Highlights 10 MANAGEMENT STRATEGY - 10 A Message from the President - 14 A Message from the CFO 16 SPECIAL FEATURE
The LINTEC Global Network 20 CORPORATE VALUE INITIATIVES - 20 LINTEC’s Value Creation - 22 Sales
- 30 Research and Development - 34 Production
- 38 Human Resources
40 THE BASE THAT SUPPORTS GROWTH - 40 Corporate Governance
- 47 A Message from an Outside Director - 48 Corporate Oficers
50 FINANCIAL SECTION
- 51 Management’s Discussion and Analysis - 53 Operating Risks
- 54 Financial Summary - 56 Consolidated Balance Sheet - 58 Consolidated Statement of Income - 58 Consolidated Statement of
Comprehensive Income
- 59 Consolidated Statement of Changes in Net Assets
- 60 Consolidated Statement of Cash Flows - 61 Notes to Consolidated Financial
Statements
- 84 Management’s Report on Internal Control over Financial Reporting - 85 Report of Independent Auditors 87 Investor Information
To All Our Stakeholders
Company Motto
Mission Statement
The company name LINTEC derives from “linkage” and “technology,” two key components of our business philosophy, which emphasizes the importance of close relations, inside and outside the company, and leading-edge R&D programs. By bringing these together to develop innovative solutions, we have established a reputation in Japan and overseas as a dynamic and reliable company that contributes to the prosperity of our stakeholders, to the growth of our industry, and to a brighter future for society as a whole. And underpinning all of our business activities is an unwavering
emphasis on “Sincerity and Creativity,” the twin values enshrined in our company motto.
For tomorrow we build today
LINTEC has a 90-year history of building on original technologies and human resources to deliver a diverse product lineup ranging from adhesive products for labels for food and daily necessities to products for the semiconductor and optical display industries.
The name LINTEC reflects our employees’ commitment to linking together people and technology to open up new business domains and play a part on the global stage. Our motto, “Sincerity and Creativity,” expresses our fundamental values as a manufacturer—openness to all our stakeholders and a spirit of innovation as we take on the chal- lenges of new product development.
We will continue to strive for sustainable growth driven by the social contribution from value that only LINTEC can create.
Hiroyuki Nishio
Representative Director President, CEO and COO
Sincerity and Creativity
FY1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 200
Accumulated Technology Capabilities
Established in 1927 as a manufacturer of gummed tape for packaging, FUJI SHOKAI significantly expanded its businesses due to the demand for cardboard boxes, which were rapidly being used as a replacement for wooden boxes. In 1960, we began selling adhesive papers for labels and subsequently entered the adhesive film field, thereby laying the foundations of our current mainstay businesses. In the 1970s, the Company diversified into products for motorcycles, automobiles, and interior / exterior decoration. After changing its name to FSK CORPORATION, the Company entered the semiconductor field in 1986 through the development of innovative products. In these ways, the Company’s business domains broadened as times changed. LINTEC Corporation came into being in 1990 through a three-way merger with SHIKOKU PAPER CO., LTD. and SOHKEN KAKO CO., LTD. This led to significant extension of the technology domain into upstream areas such as papermaking.
Since our founding in 1927 as FUJI SHOKAI, we have steadily grown through constant development of technolo-
gies and products that anticipate the needs of the times. Since the 1990 merger of three companies to form
LINTEC Corporation, the Group has been stepping up globalization. Today, LINTEC products play important roles
in a wide range of countries.
COVER STORY
LINTEC’s History
Net Sales
¥
102,608
millionGummed tape
Time of establishment UV curable dicing tape
1991
Made full-scale entry into LCD- related product ield Feb. 1994
Singapore Ofice opened May 1994
PT. LINTEC INDONESIA established as manufacturing base for adhesive products for labels
Main Highlights
Apr. 1927
FUJI SHOKAI established in Sugamo, Tokyo
Started production and sales of gummed tape for packaging Oct. 1934
The Company reorganized to establish FUJI SHIKO CORPORATION
Mar. 1960
Started production and sales of adhesive papers for labels and later commenced production and sales of adhesive ilms 1970s
Expanded business in industrial ields such as decorative materials for interiors and exteriors, motorcycles, automobiles and others
Oct. 1984
Company name changed to FSK CORPORATION 1986
Developed UV curable dicing tape and made full-scale entry into the semiconductor-related product ield
FSK CORPORATION
+
SHIKOKU PAPER CO., LTD.
+
SOHKEN KAKO CO., LTD.
Apr. 1990
LINTEC Corporation
Formed through the merger of three companies
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (Forecast)
Globalization and Reinforcement of R&D Capabilities Usher in a New Growth Phase
Following the merger, LINTEC entered the field of optically functional films for Liquid Crystal Displays (LCDs) in 1991. It was around this time that the Company became proactive in setting up plants and offices overseas. A new building for the research center that is cur- rently our core R&D facility was completed in 1995 in Saitama Prefecture.
Globalization has progressed further since the turn of the century with more rapid expansion of manufacturing and sales offices, principally in China and Southeast Asia. R&D capabilities were strengthened in 2015 with the addition of the Advanced Technology Building, a new research facility. Three acquisitions in the U.S. and Europe in 2016 marked a big stride forward in our expansion and the start of a new growth phase.
¥
250,000
million¥
205,975
millionLINTEC KOREA, INC. Advanced Technology Building MACTAC AMERICAS, LLC
Dec. 1995
New building for Research Center constructed in Saitama Prefecture Apr. 2000
LINTEC INDUSTRIES (MALAYSIA) SDN. BHD. established as manufacturing base for electronics-related products
Jun. 2011
LINTEC (THAILAND) CO., LTD., established as manufacturing base for adhesive products for labels Jan. 2015
LINTEC ASIA PACIFIC REGIONAL HEADQUARTERS PRIVATE LIMITED in Singapore established
May 2015
Advanced Technology Building constructed in Saitama Prefecture Dec. 2016
Acquired MACTAC AMERICAS, LLC in the United States
Jun. 2002
LINTEC (SUZHOU) TECH CORPORATION in China established as manufacturing base for adhesive products for labels
Sep. 2004
LINTEC KOREA, INC., established as manufacturing base for electronics- related products
(Fiscal year ended / ending March 31)
COVER STORY
LINTEC’s Distinct Features
We are drawing on the original technological capabilities we have built up over the years to establish a irm position
as a leading company in adhesive products and specialty papers. Based on our philosophy of “customer irst” and
innovative new ideas, we will continue to work on developing high-value-added products we can offer to customers
to meet their diverse range of needs.
Cultivated Technologies Realize
Our Strengths
LINTEC’s Competitive Advantages
— Integrated Production System for Adhesive Products and Provision of Comprehensive Solutions
LINTEC’s expertise extends beyond adhesives development and coating to proprietary technology in the manufacture of base paper for release papers, the development of release materials and related coating processes, and facestock improvement coating. The Group has thus built an integrated production system for adhesive products. The resulting ability to manufacture and procure release papers and ilms for adhesive products in-house gives us advantages in quality, costs, and delivery lead times. Additionally, by combining different processing technologies, we are able to create adhesive products for use in a diverse range of ields. In areas other than adhesive
products, we bring to market large numbers of unique products designed for use with upstream technologies, such as industrial-use release papers and ilms and specialty papers.
We also develop and manufacture equipment that fully leverages the properties of our adhesive materials. This includes labeling machines that automatically apply labels to packaging and equipment used in semiconductor production. Comprehensive solutions incorpo- rating materials and such equipment are another advantage of the LINTEC Group.
Integrated Production System for Adhesive Products
Printing and Industrial
Materials Products
Electronic and Optical
Products
Paper and Converted
Products
Base Paper / Film Papermaking
Base Paper
Base Paper / Film Release Agent Release Agent Development and Coating
Facestock Surface Improvement Surface Improvement Processing
Adhesive Development and Coating, and Bonding
Adhesive
Related Equipment Development
2011 2012 2016 2017 2018 (Forecast) 1992
1991
FY 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 20032004 2005 2006 2007 2008 2009 2010 2013 2014 2015
(Fiscal year ended / ending March 31)
¥
16,595
million¥
4,687
million¥
20,000
million Consumerelectronics
Food
Automobiles
Logistics
Daily necessities
Semiconductors
Printing
Pharmaceuticals
Electronic Components
Advertisement
Stationery
LCDs
Architecture / Interior
Stable Business Structure That Is Not Susceptible to Market Volatility in Any Single Industry
In recent years, the earnings drivers among LINTEC’s diverse range of products have been products for the semiconductor, electronic component, and LCD industries, which have undergone rapid market growth. Meanwhile, sales and proit luctuations have been compara- tively small for mainstay adhesive materials for labels used for food, daily necessities, pharmaceuticals, stationery, and consumer elec- tronics, and these products can be seen as foundation business that provides a irm underpinning for our earnings.
The production of a wide range of products in growth and founda- tion businesses and sales to a broad range of industries without reliance on any particular industry are the distinguishing characteris- tics of our business structure. The resulting steady earnings that are not susceptible to market volatility in any single industry are one of our strengths.
27 consecutive years of operating income
Business Model That Realizes Sustainable Growth
The numerous assets amassed by the LINTEC Group since the time of its founding are vital capital for our business
activities and the driving force in our manufacturing as we respond to wide-ranging social needs. We will continue to
return the resulting proits to our stakeholders and invest with an eye to the future as we seek to create new value.
COVER STORYLINTEC’s Business Model
Cultivated Technologies
P.30-33
Comprehensive Product supply system
in Japan and Overseas P.34-37
Diverse Human Resources and Corporate Culture
P.38-39
Solid Financial Base P.50-83
Relationships of Trust with Stakeholders
Partners
INPUT
Cooperation
Assets Buildup Business Segments
P.22-29Printing and Industrial Materials Products
• Printing & Variable Information Products Operations
• Industrial & Material Operations
Electronic and Optical Products
• Advanced Materials Operations
• Optical Products Operations
Paper and Converted Products
• Fine & Specialty Paper Products Operations
• Converted Products Operations
Trinity of Business
Activities with
Sales, R&D and
Production
P.20-21
OUTPUT
Shareholders
Communities Plants / Equipment
Employees
