Financial Overview

(in million JPY)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	Rate of change (%)	Factors
Overall
Sales	1,189,956	1,214,672	(2.0)	-
Operating Profit	92,945	165,663	(43.9)	-
Ordinary income	86,621	166,739	(48.0)	-
Net income	43,790	95,290	(54.0)	-
Glass segment
Sales *1	562,140	553,339	1.6	1)
Operating Profit	(4,000)	9,855	-	-

Factors
1) Glass segment
-Overall sales increased by 1.6% from the previous year, however, operating profit decreased by JPY 13,900 million resulting in an operating loss of JPY 4,000 million.

Background of sales increase:
-Europe: despite a drop in vehicle production due to the worsening economical climate, the Company maintained the same level of shipment volume as last year.
-Japan: vehicle production increased from last year when production slowed in the aftermath of the Great East Japan Earthquake.
-Asia & North America: vehicle production remained stable.

Management plan

-In February 2013, the Company announced its new, mid-term business plan covering from 2013 through 2015. Based on the three-year program called the "Grow Beyond-2015", the Company aims to increase sales to over 1.55 trillion yen, up 30 percent from the 2012 result, and operating profit to approximately 140 billion yen, up 50 percent from 2012. The Group is intending to achieve this goal by reducing its excessive dependence on its electronics-related business, which generated more than 70 percent of the Company's operating profit in 2012, while boosting the profitability of its glass and chemical products businesses. By 2015, the Company is going to invest 440 billion yen in plants and equipment, which includes 150 billion yen in the glass segment, and 140 billion yen in the electronics segment.

Challenges to be made to achieve the new mid-term management plan:

1.　To reinforce its growth area
-The Company aims to establish a new, highly profitable business, while anticipating a slowdown in sales at its Flat Panel Display (FPD) business.
-In the area of automotive glass, the Company will strengthen sales of functional glass such as UV cut glass and IR (infrared) cut glass, which contribute to offering comfortable cabins.
-The Company's chemical strengthened special glass, its strategic products, have been chosen for instrument panel applications on luxury vehicles made by European and U.S. automakers, marking the first adoption of such technology for automobiles.
-The Company's strategic markets include Russia, where it already has a strong presence; Brazil, where it is launching new operations; and Asia.
-Pursuing new business opportunities in Southeast Asia, the Company will establish a regional headquarters in Singapore in 2013. 

2.　To boost sales and profits
-By accelerating releases of high value-added products such as functional glass for automobiles, the Company aims to boost its overall profitability.
-The Company intends to increase sales in Europe, while accelerating development of coating products by bolstering its partnership with Germany-based Interpane Glas Industrie AG.

Recent Development Outside Japan

-The Company held in April 2012, a cornerstone-laying ceremony in Guaratingueta, Sao Paulo State, Brazil for a new plant of its subsidiary, AGC Vidros do Brasil Ltda. The Group is investing approx. 40 billion yen to start business operations in Brazil as one of its major projects. The new plant will begin operations in 2013. The Group intends to provide its globally acclaimed technologies, quality and services to customers in Brazil and increase sales of automotive and architectural glass. (From an article in the Nikkan Jidosha Shimbun on April 20, 2012)

Contracts

-The super UV blocking glass with IR blocking function, the "UV Verre Premium Cool on" has been selected for the first time for the front door windows of the Toyota Motor's "Vitz"'s special editions (the F Ciel and the F Smart Stop Package Ciel). It blocks approx. 99% of UV rays and 70% of infrared rays. (From an article in the Nikkan Jidosha Shimbun on Dec. 6, 2012)

-The Company announced that Honda has selected for the first time the "UV Verre Premium", its tempered glass for automotive front door windows that filters out approximately 99% of the sun's UV rays. It has been installed in the "She's", "HYBRID She's" and "HYBRID XH Selection" of the"Fit" compact cars. (From an article in the Nikkan Jidosha Shimbun on Jun. 9, 2012)

-The Company announced that the "UV Verre Premium" has been selected as a "beauty package" option on the front door windows of the "Aqua", Toyota's new hybrid vehicle. The "Aqua" is the fifth Toyota vehicle model using the UV Verre Premium tempered glass. The UV Verre Premium glass was initially featured on some trim levels of "Vitz" vehicles at the end of 2010. (From an article in the Nikkan Jidosha Shimbun on January 25, 2012)

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

R&D Expenditure

(in million JPY)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	FY ended Dec. 31, 2010
Overall	48,360	46,442	39,399
Glass business	8,053	8,466	8,174
R&D expenditures at the Glass Division as a % of overall R&D expenses	16.7	18.2	20.7

-The Group plans to spend approximately JPY 150,000 million in R&D activities in FY2013-2015.

R&D Activities

Glass division
-The Company will accelerate its activities to develop a new glass-melting technology, which significantly reduces both environmental footprint and production cost.
-The Company will develop high value-added products (display materials, energy-saving glass) by integrating its expertise in the areas of glass, chemical and ceramics technologies.

Product Development

Chemically strengthened special glass
-The Company will step up its efforts to expand sales of its chemically strengthened glass for automotive applications. The Company's chemically strengthened Dragontrail glass was released in January 2011. In addition to offering a significantly higher level of product strength than conventional glass, Dragontrail is extremely resistant to scratches, while featuring a high texture quality that cannot be achieved with plastics. The Dragontrail is already used widely in cover glass of smart-phones, tablet PCs, LCD TVs and other electronic devices. The Company is expecting that the thin and lightweight material will be extensively employed also in automotive products for its quality surface finish suitable for touch-screen and other technologies, as well as its superior bending form-ability. The Company is making technology-based proposals of the Dragontrail for the cover glass of car navigation systems and front instrument panels. (From an article in the Nikkan Jidosha Shimbun on Jun. 28, 2012) 

Capital Expenditure

(in million JPY)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	FY ended Dec. 31, 2010
Overall	155,300	152,700	117,400
Glass business	58,400	50,400	34,600
Capital investment at the Glass Division as a % of overall capital expenditures	37.6	33.0	29.4

-Major investment at the glass business for FY ended Dec. 31, 2012 included installing equipment for residential glass and automotive glass in Brazil factory.  

-The Group is planning to invest approximately JPY 440,000 million in plants and equipment in FY2013-2015.