Ceramic Industry

NSG Group Announces 2010 Financial Results

June 2, 2010

Nippon Sheet Glass Co. Ltd. (NSG) has reported its consolidated financial results for the 2010 fiscal year. The group achieved sales of 588,394 million yen (approximately $6,444 million), a decrease of 20.4%. The group reports challenging conditions in its major markets during the year. The first two quarters of the year were particularly severe, with recessionary conditions prevalent in most of the major countries in which the group operates.

Market conditions gradually stabilized in the third quarter and, in the fourth quarter, most of the group’s major markets stabilized at levels significantly better than earlier in the year, although still well below historically normal levels. Building products markets suffered from low levels of commercial and residential construction activity. The underlying demand for building products glass is closely linked to general economic activity, but changes in economic growth take time to feed into demand for glass, due to the time lag inherent in residential and commercial projects from approval to construction. Consequently, the increase in demand for building products glass, following the improving conditions in the final two quarters of the year, was marginal.

Automotive markets showed improvements through the year, although concerns remain that demand may soften as government support programs come to an end. Specialty glass markets demonstrated steady improvement during the year.

In Europe, building products market conditions remained difficult, with flat glass volumes being approximately 20% below the previous year. In the fourth quarter, volumes were negatively impacted by harsh weather conditions across much of central and northern Europe, although volumes did improve toward the year-end date. Market prices softened due to the excess capacity created by the low volumes, although average prices in the quarter were higher than the same quarter of the previous year.

In automotive markets, cumulative light vehicle sales were below the previous year. Fourth-quarter volumes held at similar levels to previous quarters in the year, while still significantly below those experienced before the onset of the global economic downturn. Government scrappage programs continued to provide support to the stable level of demand, although the fourth quarter saw the conclusion of incentive schemes in some European countries.

The European Automotive Glass Replacement (AGR) market continued to prove relatively resilient to the low level of general economic activity. Demand for glass cord improved steadily through the year.

Market conditions in Japan were challenging, although the fourth quarter experienced some tentative improvements. New housing starts were significantly below the levels of the previous year, although the rate of decline slowed markedly during the fourth quarter, providing optimism that the current levels of activity may represent the bottom of the cycle.

In automotive markets, light vehicle sales were approximately 10% below the previous year; however, fourth quarter light vehicles sales were approximately 20% above the previous years’ levels.

Demand for Specialty Glass products continued to improve from the previous low levels.

The North American economy continued to experience low levels of economic activity. In the building products market, housing starts remain below the level of previous years, but, as in Japan, the rate of decline now appears to be slowing.

The commercial market remains depressed. Earlier in the year, sales of new cars were aided by the U.S. government’s scrappage program. Sales initially declined following the conclusion of this program, but have since improved through the fourth quarter as consumer confidence slowly began to return. The AGR market proved challenging, with increasing pressure on both prices and volumes.

In the rest of the world, the emerging markets in which the group operates continued to perform relatively well compared to more developed markets.

For more information, visit www.nsggroup.net.