JCR's Opinion on Nippon Sheet Glass' Downward Revision of Financial Forecasts

The following is Japan Credit Rating Agency, Ltd. (JCR)'s opinion on announcement of downward revision of financial forecasts and additional restructuring measures by Nippon Sheet Glass Co., Ltd. (security code: 5202).

(1) Nippon Sheet Glass Co., Ltd. ("NSG") announced today its downward revision of financial forecasts for fiscal year ending March 31, 2013 and additional restructuring measures. The initial financial result forecasts for the fiscal year (based on IFRS) were revenue of 560 billion yen and loss for the period of 10 billion yen. Its revenue and profit/loss for the period for the fiscal year will be 530 billion yen and loss for the period of 27 billion yen. NSG's earnings are declining centered on earnings from automotive glass in Europe owing to effects from slowdown in economy caused by European financial crisis. NSG set out its plan to reduce its production capacity as additional restructuring measures to counter the worsening situation.

(2) JCR announced downgrade of the rating for NSG to "BBB" on March 23, 2012 on the ground that it would be difficult for NSG to return to the earnings level and financial structure assumed before early. The rating outlook for NSG is "Negative" because uncertainty about future is strong. While JCR has been pointing out since then that recovery in earnings power is a pressing issue for NSG, the downward revision of the earnings forecasts strengthened a prospect that economy in Europe, one of the main geographic business areas for NSG, will worsen over time. It is now becoming more likely that NSG's earnings will remain lower than expected before for the foreseeable future and that improvement in financial standing will take more time. JCR will examine the future earnings trend of glass business in Europe and impact of restructuring measures including additional measures on earnings and financial standings to be reflected in the rating for NSG.