DAIKYO INCORPORATED : 4Q Financial Results

Consolidated Financial Results for the Fiscal Year Ended March 31, 2017 (J-GAAP) (Unaudited)

May 15, 2017

Listed company: DAIKYO INCORPORATED Listed stock exchange: Tokyo Securities code: 8840 URL: http://www.daikyo.co.jp

Representative: Akira Yamaguchi, Representative Executive Officer, President Contact: Koichi Hinago, General Manager, Group Corporate Planning Dept. Planned date of Ordinary General Meeting of Shareholders: June 22, 2017

Planned date of submission of Annual Securities Report: June 22, 2017 Planned dividends payment commencement date: June 23, 2017 Preparation of earnings presentation material: Yes

Holding of earnings announcement: Yes (for institutional investors and analysts)

(Amounts less than one million yen are truncated.)

1. Consolidated Performance for the Fiscal Year Ended March 31, 2017 (April 1, 2016 to March 31, 2017)

2. Consolidated operating results (% figures show year-on-year change.) (Millions of yen)

   Net sales		Operating income		Ordinary income		Profit attributable to owners of parent
   Fiscal year ended March 31, 2017	325,360	(2.8)%	20,523	12.0%	19,967	16.8%	14,044	11.2%
   Fiscal year ended March 31, 2016	334,853	5.6%	18,318	1.1%	17,093	2.3%	12,628	3.9%

   (Note) Comprehensive income

   Fiscal year ended March 2017: ¥14,377 million / 17.8% Fiscal year ended March 2016: ¥12,209 million / (9.4)%

   Net income per share	Fully diluted net income per share	Return on equity	Ratio of ordinary income to total assets	Ratio of operating income to net sales
   Fiscal year ended March 31, 2017	¥16.63	¥16.49	8.2%	7.2%	6.3%
   Fiscal year ended March 31, 2016	¥14.94	¥14.83	7.8%	5.7%	5.5%

   (Reference) Equity in (earnings) loss of non-consolidated subsidiaries and affiliates:

   Fiscal year ended March 2017: ¥ - million Fiscal year ended March 2016: ¥ -million

3. ) Consolidated financial position (Millions of yen except for % and per-share figures.)

   Total assets	Net assets	Shareholders' equity ratio	Net assets per share
   Fiscal year ended March 31, 2017	277,899	177,863	64.0%	¥206.88
   Fiscal year ended March 31, 2016	274,594	166,090	60.5%	¥192.86

   (Reference) Shareholders' equity:

   Fiscal year ended March 2017: ¥177,863 million Fiscal year ended March 2016: ¥166,090 million

4. ) Consolidated cash flows (Millions of yen)

5. Cash flow from operating activities	Cash flow from investing activities	Cash flow from financing activities	Cash and cash equivalents at end of year
   Fiscal year ended March 31, 2017	15,229	(1,606)	(12,217)	83,722
   Fiscal year ended March 31, 2016	(11,330)	18,683	(21,500)	82,329

   Disclaimer

   This document was prepared in English for convenience purposes only. The original Japanese document shall take precedence in the event of any discrepancies arising from the translations or interpretations contained in this document.

6. State of Dividends

   Dividends per share (Yen)					Total dividends (Millions of yen)	Dividend payout ratio (Consolidated) (%)	Ratio of dividends to net assets (Consolidated) (%)
   1Q-end	2Q-end	3Q-end	Year-end	Total
   Fiscal year ended March 31, 2016	-	0.00	-	3.00	3.00	2,520	20.1	1.6
   Fiscal year ended March 31, 2017	-	0.00	-	6.00	6.00	5,040	36.1	3.0
   Fiscal year ending March 31, 2018	-	0.00	-	60.00	60.00	42.3
   (Forecast)

   Notes

7. Shares will be consolidated at the ratio of 10 shares to 1 share to take effect on October 1, 2017. The dividends per share in the fiscal year ending March 31, 2018 (Forecast) is noted here taking into account this share consolidation. Please refer to "Explanation of the Appropriate Use of Performance Forecasts; Other Points to Note" for details.

8. The above "State of Dividends" is only the status of dividends from common stock. Please refer to "State of Dividends from Class Stock" for the state of dividends from class stock (unlisted) issued by DAIKYO INCORPORATED ("the Company") with different rights from common stock.

10. Consolidated Performance Forecast for the Fiscal Year Ending March 31, 2018 (April 1, 2017 to March 31, 2018)

11. (% figures show year-on-year change.)

    (Millions of yen)

    Net sales		Operating income		Ordinary income		Profit attributable to owners of parent		Net income per share
    Full-year	340,000	4.5%	19,000	(7.4)%	18,000	(9.9)%	12,000	(14.6)%	141.96

    Note: Net income per share in the consolidated earnings forecast for the fiscal year ending in March 2018 takes into account the impact of the share consolidation. Please refer to "Explanation of the Appropriate Use of Performance Forecasts; Other Points to Note" for details.

    * Notes

    New: -

    (Company name: )

    Excluded: -

    (Company name: )

12. Changes in significant subsidiaries during the period (changes in specific subsidiaries resulting in change in scope of consolidation): None

13. Changes in accounting policies and estimates, or retrospective restatements

14. Change in accounting policies in accordance with revision of accounting standards: Yes

15. Changes in accounting policies other than item (i) above: None

16. Changes in accounting estimates: None

17. Retrospective restatements: None

18. Number of shares issued (common stock)

19. (Unit: share)

    1) Number of issued shares at end of period (including treasury stock)	Mar. 31, 2017	843,542,737	Mar. 31, 2016	843,542,737
    2) Number of shares of treasury stock at end of period	Mar. 31, 2017	3,505,142	Mar. 31, 2016	3,488,219
    3) Average number of shares during period	Apr.-Mar. 2017	840,047,752	Apr.-Mar. 2016	840,065,545

    (Reference) Overview of non-consolidated financial results

20. Non-consolidated Performance for the Fiscal Year Ended March 31, 2017 (April 1, 2016 to March 31, 2017)

21. ) Non-consolidated operating results (% figures show year-on-year change.) (Millions of yen)

    Net sales		Operating income		Ordinary income		Profit
    Fiscal year ended March 31, 2017	67,992	(21.6)%	2,879	12.6%	8,653	7.7%	8,291	(11.6)%
    Fiscal year ended March 31, 2016	86,736	0.2%	2,556	(50.0)%	8,034	(49.4)%	9,379	(44.4)%

    Net income per share	Fully diluted net income per share
    Fiscal year ended March 31, 2017	¥9.78	¥9.74
    Fiscal year ended March 31, 2016	¥11.07	¥11.02

22. Non-consolidated financial position (Millions of yen except for % and per-share figures.)

23. Total assets	Net assets	Shareholders' equity ratio	Net assets per share
    Fiscal year ended March 31, 2017	212,784	155,800	73.2%	¥180.61
    Fiscal year ended March 31, 2016	215,944	150,096	69.5%	¥173.82

    (Reference) Shareholders' equity:

    Fiscal year ended March 2017: ¥155,800 million Fiscal year ended March 2016: ¥150,096 million

24. Non-consolidated Performance Forecast for the Fiscal Year Ending March 31, 2018 (April 1, 2017 to March 31, 2018)

25. (% figures show year-on-year change.)

    (Millions of yen)

    Net sales		Ordinary income		Net income		Net income per share
    Full-year	58,000	(14.7)	9,800	13.3	10,300	24.2	121.72

    Note: Net income per share in the consolidated earnings forecast (full year) for the fiscal year ending in March 2018 takes into account the impact of the share consolidation. Please refer to "Explanation of the Appropriate Use of Performance Forecasts; Other Points to Note" for details.

    • The summary of financial statements is exempt from audit procedures.

    • Explanation of the Appropriate Use of Performance Forecasts; Other Points to Note

26. Forward-looking statements in this document, including the performance outlook, etc., were written based on the information the Company has at this time and certain assumptions the Company considers to be reasonable. Actual performance may differ from the forecast figures due to various factors.

    Please refer to "1. Operating Results and Financial Position (4) Forecasts" on page 13 of the Appendix for details.

27. At the meeting of the Board of Directors held on May 15, 2017, a decision was reached to submit proposals to the 93rd Ordinary General Meeting of Shareholders of the Company, to be held on June 22, 2017, with respect to share consolidation. Shares will be consolidated at the ratio of 10 shares to 1 share and this change will be subject to the approval, at the 93rd Ordinary General Meeting of Shareholders to take effect on October 1, 2017. As a result, the dividends per share in the next fiscal year, taking into account this share consolidation, is noted here. We forecast dividends of ¥6 per share in the next fiscal year when not taking into account the share consolidation.

    In conjunction with this, we also plan to change the number of shares constituting one full unit of stock (from 1,000 shares to 100 shares).

    The dividend forecasts, consolidated earnings forecasts, and individual earnings forecasts for the fiscal year ending in March 2018, when not taking the share consolidation into account, are as follows.

28. Dividend forecast for the fiscal year ending in March 2018 (common stock) Dividends per share

    Year end: ¥6

29. Dividend forecast for the fiscal year ending in March 2018 (Class 1 preferred stock) Dividends per share

    Year end: ¥7.51

30. Consolidated earnings forecast for the fiscal year ending in March 2018 Net income per share

    Full year: ¥14.20

31. Individual earnings forecasts for the fiscal year ending in March 2018 Net income per share

    Full year: ¥12.17

32. The Company is scheduled to hold an earnings announcement for institutional investors and analysts on May 23, 2017. The presentation materials used on that day will be promptly uploaded after the announcement on the Company's homepage.

33. State of Dividends from Class Stock

    The breakdown of the dividends per share and the amount of dividends from class stock with different rights from common stock are as follows.

    (Class 1 preferred stock)

    Annual dividends (Yen)					Total dividends (Millions of yen)
    1Q-end	2Q-end	3Q-end	Year-end	Total
    Fiscal year ended March 31, 2016	─	─	─	8.13	8.13	81
    Fiscal year ending March 31, 2017	─	─	─	7.73	7.73	77
    Fiscal year ending March 31, 2018 (Forecast)	─	─	─	75.12	75.12	75

    Note: As we plan to carry out a share consolidation effective October 1, 2017, in which each 10 shares will be consolidated as one share, the figures for year-end dividends and total annual dividends per share for the fiscal year ending March 2018 (forecast) reflect the share consolidation. For details, please refer to "Explanation of the Appropriate Use of Performance Forecasts; Other Points to Note."