alconix corporation · established alconix diecast suzhou acquired trading rights of mitaka metal...

Company Overview / Appendix

ALCONIX CORPORATION (Listed on TSE First Section, Code 3036)

November 2015

Copyright ©2015 ALCONIX CORPORATION All Rights Reserved 2

About ALCONIX


Business Summary


Business range Business summary

ALCONIX is a trading company group with comprehensive operations that encompass

everything from the distribution and sale of non-ferrous metals to the manufacture of

metal products.

1.6Non-ferrous metals

(metals other than steel) 5-6%

Products

Fabricated

products


Three main characteristics of the ALCONIX Group Business summary

13


37.6%

57.7%

7.0%

4.0%

Figures are FY3/15 results

Segment weighting

(sales)

Segment weighting

(profits)

Segment weighting

(profits)

Segment weighting

(sales)

Aluminum coils

Copper products

Precision fabricated parts

Valves, joints, etc. Brass copper rod

Die cast products

Terra cotta products Aluminum handrails

Aircrafts

Automobiles (bodies)

Motorcycles (aluminum frames, etc.)

Air conditioners (copper tubes)

Artificial satellite (communication parts)

Lead frames (for semiconductors)

Businesses Our trading products End productsMain business

areas

Light metals & copper products

Japan, China,

Asia, Europe,

Latin America

Consolidated

subsidiaries

OHKAWA CORP.

OHBA SEIKEN

CO., LTD.

Construction & industrial materials

Japan, Asia

Consolidated

subsidiaries

ALCONIX

(THAILAND) LTD.,

TOKAI YOGYO

CO., LTD.

Traditional business/ Light metals & copper products, Construction & industrial materials

Business summary

Main business

areas


Businesses Our trading products End productsMain business

areas

Electronic & advanced materialsJapan, North

America, Europe,

China, Asia

ADVANCED

MATERIAL JAPAN

CORPORATION,

UNIVERTICAL

HOLDINGS INC.,

etc.

Non-ferrous materials

Japan, China,

Asia

ALUMINUM &

COPPER

RECYCLING

CENTER

CORPORATION

37.3%

33.3%

18.1%

5.2%

High growth business/Electronic & advanced materials, Non-ferrous materials Business summary

Figures are FY3/15 results

Segment weighting

(sales)

Segment weighting

(profits)

Segment weighting

(sales)

Segment weighting

(profits)

Titanium coils Compound semiconductors

and other electronic materials

Titanium sponge Rare earth strips

Rare earth ingots Rare earth

compounds

Aluminum alloy

ingots

Metal scraps

Steel

Automobiles Tablet PCs,

smartphones

LCD TVs Rare earth magnets

Titanium products (heat exchangers)

Cell phones

Shaft furnace

Automobiles Semiconductors

Consolidated

subsidiaries

Consolidated

subsidiaries

Main business

areas


Expansion through M&As and business investments Business summaryExpansion through M&As and business investments Business summary

Management

Buy-Out

(USA, China, Hong Kong, Taiwan,

Thailand, Malaysia and Germany)

Changed company name to

"ALCONIX CORPORATION"

Nissho-Iwai Non-Ferrous Metals Corp. founded

Changed company name to Nissho Iwai Alconix Corporation

Trading rights of non-ferrous metal products business transferred from Nissho-Iwai Corp.Merged with Nissho-Iwai Metal Products, extending trading rights ■ Business

investment

■ M&A ■ Overseas

network

expansion

Acquired trading rights for recycling raw materials of non-ferrous metals from Sojitz Metals Co., LTD., extending trading rights

Established 6 joint ventures in China

Acquired trading rights of copper pipe product sales from Goko Shizai Co., Ltd.

Acquired HAYASHI METAL CORP.

Acquired OHKAWA CORP.

Established ALCONIX DIECAST SUZHOU

Acquired trading rights of Mitaka Metal Industry Co., Ltd. and transferred the

rights to newly established ALCONIX・MITAKA CORP.

Invested in affiliates in China

Established ALCONIX VIETNAM CO., LTD.

� Became equity-method affiliates

• Shanghai Longyang Precise Compound Copper Tube Co., Ltd.• Hangji Chuangfu (Foshan) Metal Product Co., Ltd.

■ Acquired trading rights of aluminum and copper products from Sanshin

Rinkei, embarking on downstream (retail) business

Jointly established Winton International Industries Ltd., embarking on

manufacturing and marketing polygon mirrors for LBPs

Jointly established Shenzen Shenzhi Precision Parts Co., Ltd. (China), embarking

on manufacturing and marketing aluminum cases for lithium batteries

Acquired OHBA SEIKEN CO., LTD.

Acquired UNIVERTICAL CORPORATION and other companies

(U S-based 4 companies) and established wholly owned

holding company UNIVERTICAL HOLDINGS INC.

Acquired trading rights of aluminum scrap business and transferred the rights to newly established OSAKA ALUMI CENTER CO., LTD.

Business expansion

■ Acquired ADVANCED MATERIAL JAPAN CORPORATION (AMJ),

embarking on minor metal and rare earth materials business

Foundation of overseas

sites

Invested in K’MAC Co., Ltd. and made it an equity-method affiliate

Acquired the copper scrap businessEstablished Kitakyushu Inada Copper Center

Listed on Tokyo Stock Exchange,

First section

Listed on Tokyo Stock Exchange, Second section

Listed on JASDAQ

Acquired TOKAI YOGYO CO., LTD.


事業概要事業概要事業概要事業概要事業概要事業概要事業概要事業概要

The ALCONIX Group has a unique overseas network that emphasized profitability

(As of March 2015)

●●●●Overseas subsidiaries and liaison offices

Chicago, USA: ALCONIX USA., INC.

Hong Kong, China: ALCONIX HONGKONG CORP., LTD.

Bangkok, Thailand: ALCONIX (THAILAND) LTD.

ALCONIX LOGISTICS (THAILAND) LTD.

Shanghai, China: ALCONIX (SHANGHAI) CORP.

Beijing, China: ALCONIX (SHANGHAI) CORP., Beijing Branch

Shenzhen, China: ALCONIX (SHANGHAI) CORP., Shenzhen Branch

Guangzhou, China: ALCONIX (SHANGHAI) CORP., Guangzhou Branch

Dusseldorf, Germany: ALCONIX EUROPE GMBH

Kuala Lumpur, Malaysia: ALCONIX (MALAYSIA) SDN. BHD.

Taipei, Taiwan: ALCONIX (TAIWAN) CORPORATION

Hanoi, Vietnam: ALCONIX VIETNAM CO.,LTD.

Moscow Liaison Office (Russia): ADVANCED MATERIAL JAPAN CORPORATION

Vladivostok Liaison Office (Russia): ADVANCED MATERIAL JAPAN CORPORATION

ADVANCED MATERIAL BEIJING CORPORATION (China): ADVANCED MATERIAL JAPAN CORPORATION

ADVANCED MATERIAL TRADING PTE.LTD.(Singapore)

▲▲▲▲Overseas agents

Cairo, Egypt: Sojitz Corporation, Cairo Liaison Office

Dusseldorf

Cairo

Moscow

Vladivostok

Beijing

Shanghai

Shenzhen

Guangzhou

Bangkok

Kuala Lumpur

Singapore

Taipei

Hong Kong

Hanoi

Chicago

11 overseas sites,

16 locations

Solid overseas network


Business Model


The integrated ALCONIX business model Business model

Operations that unify manufacturing and sales by using synergies from trading company

and manufacturing capabilities

Changes in the external

environmentCustomers’ needs

Manufacturing

and Recycling

(up-stream

activity)

Direct investment in manufacturersEstablish manufacturing in joint venture

Business base:domestic/overseas

Logistics functions linking materials/

non-ferrous metal refiners with customers

Trading

company

(mid-stream

activity)

Business base:domestic/overseas/third-party countries

Wholesale/retail functions

Business base: within Japan

Wholesale

(downstream

activity)


Business fields Business model

Ba

se m

eta

lsM

ino

r me

tals

Min

ing

en

tities (o

ve

rsea

s)

Ore Ingots Products

ADVANCED MATERIAL JAPAN CORPORATION (AMJ)

(Consolidated subsidiary)

Major

trading

firms

Sm

eltin

ge

ntitie

s (d

om

estic/o

ve

rsea

s)

Ro

lling

, ex

trusio

n, re

pro

cessin

g

en

tities (d

om

estic/o

ve

rsea

s)

Raw resource-trading firms

CompetitorsNon-ferrous metal smelters' trading firms, group companies of major general trading firms, etc.

Product-trading firms

Group companies of major general trading firms, independent and mid-sized non-ferrous trading firms, etc.

End products

End user industries

Automobiles

Consumer electronics

Semiconductors/IT

Aircrafts

Pro

du

cts

OHKAWA CORP.


OHBA SEIKEN CO., LTD.


Processing parts (machining/grinding)

Plating materials


En

d p

rod

ucts

En

d p

rod

ucts

End user industriesAutomobiles Semiconductors

End user industriesAircrafts Semiconductors/IT


区区区区分分分分形形形形態態態態在庫の在庫の在庫の在庫の

有無有無有無有無収益性収益性収益性収益性収益計上収益計上収益計上収益計上

市況が上昇局面市況が上昇局面市況が上昇局面市況が上昇局面

利益額利益額利益額利益額利益率利益率利益率利益率

出合取引

■当社が価格等の条件を需要家・メーカーに対し個

別に決定

■当社が物流を手配・コントロール

持たない■在庫リスクはなし

■収益性は相対的に高いマージン/口銭 ○（買い意欲） ○

直送取引■メーカーと需要家の間で、価格・納期・数量が決定

■メーカーから需要家へ直接納品持たない

■在庫リスクはなし

■収益性は低い

口銭（定額）

口銭（建値×定率）

口銭（加工賃×定率）

○（買い意欲）



やや○

―

やや△

在庫取引①（売契約あり）

■当社が特定の需要家の買い予約を受け、在庫を

持ちJust in Timeで納品する保有

■在庫リスクはなし

■収益性は平均的マージン/口銭 ○（買い意欲） ―

在庫取引②（売契約なし）

■当社が不特定多数の需要家の注文を予想して在

庫を抱える。保有

■在庫リスクあり

■収益性は高いマージン ○（買い意欲） ○

○：プラス、△：マイナス、―：中立

Business model -Features of trading capabilities and profit structure Business model

Business style Business flow Inventory Profitability Profit source

When market prices rise

Amount of

profitProfit margin

Intermediary

�ALCONIX concludes each contract with

clients or supplier individually

�ALCONIX facilitates and control

distribution

No

inventory

�No inventory risk

�Profitability tends to be

relatively high

Margin/ commission○ (Eager to

purchase)○

Direct

�Contract conditions (price, delivery date,

amount) are concluded between our client

and supplier

�Supplier deliver directly to our client

No

inventory


�Profitability tends to be low

Commission (fixed

amount)

Commission (transaction

price x fixed rate)

Commission (processing

costs x fixed rate)

○(Eager to

purchase)

○(Eager to

purchase)

○(Eager to

purchase)

Slightly ○

-

Slightly △

Inventory-1

(Already

contracted)

�ALCONIX takes an order from specific

client, holds inventory and delivers just in

time

Hold

inventory



average

Margin/ commission○(Eager to

purchase)-

Inventory-2

(No sales

contract)

�ALCONIX controls, and holds inventory

regardless of any clients order

Hold

inventory

�Existence of inventory risk


high

Margin○(Eager to

purchase)○

� Market price rise � expansion of client demand; Market price drop � restraint in client demand

� Relatively small impact of market volatility on our transactions

� Some "Intermediary" and "Inventory-2" transactions are directly impacted by the market.

� "Inventory-2" transactions account for only 5% of total transactions. This limits the direct impact of market volatility

on our profits.

○: Positive △: Negative ―: Neutral


Corporate Data


JASDAQ

上場上場上場上場

東証東証東証東証2部部部部

上場上場上場上場

東証東証東証東証1部部部部

指定替え指定替え指定替え指定替え

(Unit: million yen)

FY3/06 FY3/07 FY3/08 FY3/09 FY3/10 FY3/11 FY3/12 FY3/13 FY3/14 FY3/15

Net sales 127,627 172,781 215,839 165,439 109,192 157,979 220,703 164,769 183,749 201,543

Cost of sales 122,968 166,668 208,571 159,582 103,259 149,710 210,060 156,010 172,754 189,452

Gross profit 4,659 6,112 7,268 5,857 5,932 8,268 10,642 8,759 10,995 12,091

SG&A expenses 3,175 3,631 4,195 4,212 4,395 5,191 5,955 5,473 7,510 7,506

Operating income 1,483 2,480 3,072 1,645 1,537 3,077 4,687 3,286 3,484 4,584

Ordinary income 1,214 1,910 2,452 1,577 1,402 2,963 4,499 2,892 3,600 5,205

Income before income taxes and

non-controlling interests1,133 1,903 2,512 564 2,456 3,376 4,453 2,594 4,509 5,213

Net income 583 1,076 1,427 181 1,799 1,901 2,450 1,430 3,144 3,505

Total assets 36,660 49,973 54,290 39,137 40,219 64,561 68,600 70,382 85,664 89,848

Net assets 3,533 5,263 7,152 7,325 9,157 12,144 14,020 15,818 21,368 26,951

Interest-bearing debt 7,562 10,520 14,505 13,175 11,915 25,345 23,148 26,926 29,913 30,130

Listed on JASDAQListed on TSE 2nd

Section

Designated for

listing on TSE 1st

Section

Consolidated financial summary Corporate data


Main financial indicators Corporate data

FY3/10

FY3/11(Listed on TSE 1st sec.)

(stock split in Aug.

*note 1)

FY3/12 FY3/13 FY3/14FY3/15

(stock split in Aug.

*note 1)

Net assets per share (cons.) (Yen) 1,673.47 1,867.97 2,143.39 2,414.98 3,276.42 2,053.83

Net income per share (cons.) (Yen) 337.61 339.31 385.71 225.16 494.77 274.76

Dividend per share

(of which commemorative dividend)

(of which interim dividend)

(Yen) 85.00

(0.00)

50.00Note 2 (5.00)

(0.00)

60.00

(25.00)

60.00

(30.00)

65.00

(30.00)

40.00

(18.00)

Dividend payout ratio (%) 12.6% 14.7% 15.6% 26.6% 13.1% 14.6%

Number of shares outstanding (Shares) 2,666,400 6,347,800 6,353,200 6,355,200 6,358,800 12,813,200

Return on Equity (cons.) (%) 22.4% 18.3% 19.2% 9.9% 17.4% 14.9%

Return on Assets (cons.) (%) 3.5% 5.7% 6.8% 4.2% 4.6% 5.9%

Equity ratio (cons.) (%) 22.2% 18.4% 19.8% 21.8% 24.3% 29.3%

Net debt equity ratio (Times) 0.7 1.4 0.9 1.0 0.8 0.7

Number of employees (cons.) 361 402 411 511 752 797

Note 1: ALCONIX conducted a 2-for-1 stock split on August 1, 2010 and August 1, 2014. The net income per share in FY3/10 and FY3/15 were assumed that the stock split was previously conducted.

Note 2: ALCONIX paid a year-end dividend for FY3/11 of 50 yen per share, consisting of its original 45 yen dividend plus five yen to commemorate its designation for listing on the First Section of the

Tokyo Stock Exchange.

�Net income per share: Not considered potential stock

�Return on Asset = Ordinary income / (Average of year-start and year-end total assets of FY)

�Return on Equity = Net income / (Average of year-start and year-end net assets of FY, excluding non-controlling interests and subscription rights to share)

�Net debt equity ratio = (Interest-bearing debt - Cash and deposits) / Net assets

�Number of employees: Excludes directors of the Company and employees dispatched from temporary staff agencies, but includes seconded employees dispatched from the Company to other

companies, contract staff, and staff dispatched from other companies. All figures are based on the securities report (“Yukashoken Hokokusho”)


Percentage breakdown of ALCONIX Group transactions by product category Corporate data

* Based on results at the end of FY3/15 (value basis)

Aluminum

Copper

Others

Minor metals

Total

Of which nickel

3.9%

Nickel powder, nickel foam (battery materials),

plating nickel ingot, etc.

Non-ferrous metal materials for

automotive applications, metal silicon,

magnesium, zinc, valve parts, piping

joints, construction materials, plating

materials, precision machining

processing parts, precision grinding

processing parts, etc.

Aluminum fins, aluminum foil,

tubes, strips, sheets, aluminum

alloy ingots, scraps, primary ingots,

fabricated aluminum products, etc.

Copper products (tubes, sheets,

strips), electrolytic copper, copper

products for semiconductors,

brass copper rod, copper scrap,

electric wire, and other fabricated

copper products

Titanium, tungsten, molybdenum,

rare earth, gallium, indium, cobalt,

antimony, cadmium, barium,

industrial sapphire, electronic

materials, advanced materials,

magnetic materials applications, etc.


Market position (share) Corporate data


Category Number of

shares held

Shareholding

ratios

Number of

shareholdersComposition

Financial

institutions 3,602,400 27.98% 27 0.87%

Securities

companies 403,702 3.14% 32 1.04%

Other Japanese

entities 2,843,060 22.08% 63 2.04%

Overseas entities 2,621,477 20.36% 75 2.43%

Individual investors,

others 3,403,748 26.44% 2,890 93.59%

Treasury stock 413 0.00% 1 0.03%

Total 12,874,800 100.00% 3,088 100.00%

Name of shareholdersNumber of

shares held

Shareholding

ratios

BBH FOR FIDELITY LOW-PRICED

STOCK FUND1,173,600 9.12%

Japan Trustee Services Bank, Ltd.

(Trust Account)1,166,400 9.06%

Kobe Steel, Ltd. 853,600 6.63%

Mizuho Bank, Ltd. 396,000 3.08%

The Sumitomo Trust & Banking Co., Ltd. 372,000 2.89%

BNYM SA/NV FOR BNYM CLIENT ACCOUNT

MPCS JAPAN305,500 2.37%

KITZ Corporation 281,200 2.18%

The Bank of Tokyo-Mitsubishi UFJ, Ltd. 260,000 2.02%

SBI SECURITIES Co., Ltd. 233,800 1.82%

JAPAN PURE CHEMICAL CO., LTD. 200,000 1.55%

Others 7,632,700 59.28%

Total 12,874,800 100.00%

BBH FOR FIDELITY

LOW-PRICED STOCK FUND

9.129.129.129.12%

Japan Trustee Services Bank,

Ltd. (Trust Account)

9.069.069.069.06%

Kobe Steel, Ltd.

6.636.636.636.63%Mizuho Bank, Ltd.

3.083.083.083.08%

The Sumitomo Trust

& Banking Co., Ltd.

2.892.892.892.89%

KITZ Corporation

2.182.182.182.18%The Bank of Tokyo-

Mitsubishi UFJ, Ltd.

2.022.022.022.02%

BNYM SA/NV FOR BNYM

CLIENT ACCOUNT MPCS

JAPAN

2.372.372.372.37%

SBI SECURITIES Co., Ltd.

1.821.821.821.82%

JAPAN PURE CHEMICAL

CO., LTD.

1.551.551.551.55%

Others

59.2859.2859.2859.28%

Main shareholders Corporate data

(As of September 30, 2015) (As of September 30, 2015)


Shareholder returns: Trend in dividend per share and dividend payout ratio Corporate data

(Yen)

Dividend payout

ratio

(consolidated)

Total interim dividends

(after the August 2014 stock split)Total year-end dividends (after the August 2010 and August 2014 stock splits)

Dividend payout ratio (consolidated)

Increase of 5 yen

due to stock split

Increase of 2 yen

due to stock split

Increase of year-

end dividend by

4 yen

FY3/06 FY3/07 FY3/08 FY3/09 FY3/10 FY3/11 FY3/12 FY3/13 FY3/14 FY3/15 FY3/16

(Forecast)


Stock price indicator Corporate data

Stock price April 1, 2014 – September 30, 2015

Adjusted closing price (yen)

Stock split on

August 1Closing stock prices adjusted for the August 1 stock split

Adjusted closing

price

Market cap

(million yen)

June 12, 2015

(Highest)

2,193 yen

June 12, 2015

Estimated PER: 7.0

Estimate PBR: 1.0

Record high market

capitalization: June 12

(28,167 million yen)

Market capitalization (million yen)

2014

Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.

2015

Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep.


Market Chart (Reference Materials)


Market trends (main non-ferrous metals: copper, aluminum and nickel)

Market chart (reference materials)

Market turns volatile after 2013 as the Chinese economy slows following

strong expansion

* Based on London Metal Exchange (LME)Copper/Aluminum

Copper (3 months futures)Aluminum (3 months futures)

Nickel (Cash)

Nickel

Copper (3 months futures)

Nickel (Cash)

Aluminum (3 months futures)

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015


Market trends (minor metals) Market chart (reference materials)

Titanium sponge prices remain weak, but tungsten and indium prices have risen in

2013 on recovery expectations for the Japanese economy

Molybdenum/Tungsten/Titanium sponge

Molybdenum

Tungsten

Titanium sponge

Indium

Indium

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015


Market trends (rare earth) Market chart (reference materials)

Rare earth prices, which have remained sluggish since July 2011, recovered thanks to

the upturn in operating environment. However, the prices remain weak.

Dysprosium

Dysprosium

Neodymium

Lanthanum

Cerium

Neodymium/Lanthanum/Cerium

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015


【【【【スマートフォン出荷台数スマートフォン出荷台数スマートフォン出荷台数スマートフォン出荷台数(四半期ベース）四半期ベース）四半期ベース）四半期ベース）】】】】

データ出所：米調査会社IDC

Non-ferrous metal application 1 (Smartphones) Market chart (reference materials)

Smartphone shipments are consistently high despite increasing competition as new

companies emerge to compete with established manufacturers.

PWB

- Aluminum

- Copper

- Ceramic

LCD panel

(Touch panel)

- Indium - Tin

- Copper - Silicon

Vibrator

- Neodymium

- Dysprosium

- Iron - Copper

- Tungsten

Camera

- Copper - Nickel

- Gold - Lanthanum

Earphones AC Jack

- Gold - Nickel

- Neodymium

- Dysprosium

Body

- Aluminum

- Magnesium

- Antimony

IC

- Gold - Silver - Copper

- Silicon - Gallium

Condenser

- Titanium - Barium - Copper - Nickel - Zirconium

- Tantalum - Samarium

Chip resistors

- Iron - Silver - Nickel - Copper - Zinc

Quartz crystal units

- Silicon - Copper - Nickel - Gold

Batteries

- Lithium - Nickel - Cobalt - Aluminum

Smartphone Shipments (Quarterly)

(Million units)

Global

Firm A

Firm B

Source: IDC (US research company)


【【【【国内販売台数、国内販売台数、国内販売台数、国内販売台数、HV車割合車割合車割合車割合】】】】

Non-ferrous metal application 2 (Automobiles) Market chart (reference materials)

Motors for auto

equipment

(starter, power steering,

power window, wiper,

seat adjust, etc.)

- Copper - Neodymium

- Barium - Strontium

Engine room,

radiator

- Aluminum

- Copper

- Zinc

Driving motors

(hybrid vehicle)

- Neodymium

- Dysprosium

- Aluminum

- Copper

Wheels

- Aluminum

- Magnesium

Pipes

- Copper

Exhaust emission control

system (catalyst)

- Platinum - Rhodium

- Palladium - Lanthanum

- Cerium

Body, interior, electric

components

- Aluminum

- Molybdenum

- Copper - Antimony

- Zinc

Car batteries

(hybrid vehicle)

- Nickel - Cobalt

- Lithium

- Lanthanum

Number of Domestic Sales; Share of HV

(Thousand units)Total four-wheel vehicle sales Total HV sales Ratios

Source: Next Generation Vehicle Promotion Center


【【【【地域別ジェット旅客機運航機数および需要予測地域別ジェット旅客機運航機数および需要予測地域別ジェット旅客機運航機数および需要予測地域別ジェット旅客機運航機数および需要予測】】】】

データ出所：日本航空機開発協会

Non-ferrous metal application 3 (Aircraft) Market chart (reference materials)

Global private-sector aircraft demand is forecast to double over the next 20 years.

Fuselage, wings, fin stabilizer (external panels and structural parts)

- Aluminum alloy

(Aluminum, copper, magnesium, lithium, etc.)

(External panels and structural parts: More than 50% of aircraft)

- Stainless steel (chrome/nickel, used in structural parts)

- Magnesium, titanium (joints, bolts, connectors)

- Nickel, zinc (fuselage plating)

Engines

Engines require many high-performance non-ferrous alloys in order to withstand temperatures that range from far below freezing to well over 1,000 degrees.

- Titanium alloys (fan, engine frame, case, blades, etc.)

(Alloy with vanadium, molybdenum, zircon, etc.)

- Nickel alloys (turbine and especially the high-temperature section after the compressor)

(Alloy with chromium, tantalum, molybdenum, niobium, tungsten, etc.)

* Titanium and nickel account for more than 40% of materials used to make jet engines.

Passenger Jet Aircraft Worldwide and Projected Demand

Current no. of aircraftProjected future demand

Landing gear (leg parts)

- Nickel - Chrome - Molybdenum

* Landing gear parts, which require the greatest strength, use nickel-chrome-molybdenum steel.

Aircraft use many types of non-ferrous metals, mainly aluminum and titanium,

including minor metals and rare earths.

Number of aircraft operating

End of 2013: 19,208

End of 2033: 36,769

Estimated increase 2014-2033: 32,217

Source: Japan Aircraft Development Corporation

North America

Europe Asia/Pacific Middle East

Latin America

Africa

These materials were prepared to help

investors understand ALCONIX and were not

intended as a solicitation for investment in

ALCONIX. These materials were prepared

carefully for accuracy, but the completeness of

these materials cannot be guaranteed.

ALCONIX will not be held responsible for any

problems or damages that result from the

information provided in these materials.

Earnings forecasts and other future forecasts in

these materials were made based on the

judgment of ALCONIX using information

available at the time these materials were

prepared. These forecasts embody latent risk

and uncertainty. Please understand that actual

earnings may differ from these forecasts due

to changes in the business environment and

other factors.

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