Financial Overview

(in millions of JPY)

	FY2010	FY2009	Rate of change (%)	Factors
Overall
Sales	577,212	588,394	(1.9)	- Although sales for automotive glass slightly decreased, following the termination of new car sales incentive programs that had been still effective, the market continued to show signs of recovery throughout the year. - Damage from the March 11 earthquake was relatively small. But the volume of vehicle production at its customers decreased due to supply chain interruptions caused by the disaster.
Operating income	14,352	(17,183)	-
Ordinary income	7,730	(28,552)	-
Current net income	1,661	(41,313)	-
Automotive Glass Business
Sales	264,042	265,017	(0.4)	- Profit from automotive glass products increased from last year thanks to strong demand from each market.
Operating income	18,672	13,020	43.4

Automotive Glass Division
<Europe>
-Sales in Europe account for 47% of the Automotive Glass Division's sales.
-Sales of automotive glass for new vehicles increased significantly thanks to growing demand, which resulted in improved operating profit.

<Japan>
-Sales in Japan account for 17% of the Automotive Glass Division's sales.
-Although sales rose in the first half of the year supported by improvement in demand, the increase was offset by the negative effects of the termination of the eco-car incentive scheme and the impact of the Great East Japan Earthquake in the second half.  
-Operating profit increased as a result of the Company's efforts to cut cost and improve operational efficiency.

<North America>
-Sales in North America account for 21% of the Automotive Glass Division's sales.
 -Sales of glass for new vehicles largely increased from the previous year thanks to growth in demand.
-Operating profit increased as a result of the Company's efforts to cut cost and improve operational efficiency. 

<Other regions>
-Sales and operating profit in other regions increased substantially from the previous year, as the Company enjoyed strong demand in each market.

Strategic Management Plan 

-In November 2010, the Company released its 3-year Strategic Management Plan through fiscal 2013. Highlighting an average annual growth rate of 5 percent in sales, doubling operating profit margin and achieving return on equity of 10-14 percent, the business plan calls for expansion of the product lineup to meet growing new emerging markets and rising demand for environmentally friendly glass products. The strategy also includes a 20 percent improvement in productivity in research and development activities, as well as an increase in capital investments equal to 120 percent of tangible fixed assets depreciation. Investment priorities have been set for each category of glass products, including for buildings, automobiles and functionality. Priority areas for the automobile glass are South America, Eastern Europe and Mexico. (From an article in the Nikkan Jidosha Shimbun on November. 5, 2010)

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

R&D Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Overall	10,700	12,100	10,500
Automotive Glass Division	4,000	4,300	3,200

R&D Structure

-The Company conducts research of automotive glass at its technology research center in Itami city, Hyogo prefecture.
 -Functions of the Technical Division include R&D, development of glazing systems, and development of global tooling systems. The integrated technical unit aims to develop innovative new products and efficient production processes.

R&D Activities

Automotive Glass Division
-The Automotive Glass Division focuses on developing switchable light-control glass and lightweight glass, which support the "Eco Innovation" initiatives to reduce emissions of greenhouse gas.
-Development and introduction of automatic testers for inspecting all products produced on the Company's mass-production lines.

Capital Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Overall	31,900	15,700	42,100
Automotive Glass Division	16,100	12,700	15,600

Automotive Glass Division
-Mainly in initiatives to improve technological capabilities in Italy and Braｚil.

-The NSG Group announced plans to expand the Group's Pilkington Automotive operations in Poland. The investment involves the construction of a new automotive glazing plant at Chmielow. The new plant will be dedicated to the production of windshields, sidelights and backlights for cars and trucks. The first phase of the investment will increase the Group's automotive windshield capacity in Poland by 1.7 million pieces a year. A second phase addition of a toughening line will add further capacity for the manufacture of 4 to 5 million back and side lights annually. The new tertiary operation lines are due to come on stream in mid-calendar year 2011, with the secondary operation lines being commissioned from mid-2012 through to the end of calendar year 2013. The Group's financial investment in the project will be around 10 billion yen (350 million polish zloty). (From a press release on March 10, 2011)

-The Company opened a new laminating line at Cacapava (Sao Paulo), Brazil in February 2011. The new line will increase the company's capacity in Brazil by around 50 percent, permitting the production of some 3.7 million windshields a year. The line will be in full production by the end of March 2011. In addition to the laminating line, work is well advanced on an additional toughening capacity at the Cacapava site. The toughening line will start up in December 2011, with full production planned for the end of March 2012. (From a press release on February 22, 2011)

-The Company announced expansion of production capacity of automotive glass products in Mexicali, Mexico. A new facility for supplying the products to both aftermarket and original equipment markets will be built at a site adjacent to the existing plant. The new facility will produce windshields. The expansion is scheduled to be completed in early 2012, thereby boosting production capacity by 30 percent. After the expansion is completed, production capacity will be increased to 2.5 million windshields. The investment is expected to create 160 jobs. The products will not only be delivered to the Mexican domestic market, but also exported to North, Central and South American countries. (From an article in the Nikkan Jidosha Shimbun on December. 9, 2010)

Major New Facilities(As of Mar. 2011)

Company Office	Location	Overview	Planned amount of investment (in million JPY)	Start	Complete
Pilkington Brazil Ltda	Brazil	Manufacture of glass	2,500	Jan. 2011	Jan.-March 2012
Pilkington Automotive Poland SP. Zo. o.	Poland	Manufacture of glass	5,900	Sep. 2011	Jan.-March 2013
Maizuru plant	Japan	Manufacture of glass	3,100	Jan. 2010	Aug 2011