TO OUR SHAREHOLDERS
We would like to express our deepest condolences to those who lost their lives in the 2024 Noto Peninsula earthquake and their bereaved families, and our deepest sympathies to all others who suffered.
We would also like to express our sincere gratitude to our shareholders for your continued support and cooperation. We hereby report the results for the NACHI-FUJIKOSHI Group for the period from December 1, 2022 to November 30, 2023.
Business Environment
The environment surrounding the Group during the fiscal year continued to experience a gradual recovery overall,with the normalization of economic activity progressing in response to the recovery in automobile production and other factors. On the other hand, the outlook remains uncertain due to several factors,including the continued high prices of raw materials and energy resulting from the protracted conflict in Ukraine,the slowdown of the Chinese economy due to a downturn in the real estate market,escalating tensions in the Middle East region, and the impact of financial tightening in Europe and the United States.
Business Progress and Results
Under these circumstances, the Group has been making full use of its strength as a comprehensive machinery manufacturer while taking into account major industrial structural changes in the medium to long term, such as the shift toward decarbonization and increased adoption of EVs. The group is leveraging its strengths in the cutting tools, machine tools, robotics, bearings, hydraulic equipment, and special steel businesses to realize the expansion of orders and sales by developing new products and offering technical proposals that contribute to users’ manufacturing. We have also been proceeding with structural reform across our overall business, including reorganization and streamlining of our plants around the world, and the expansion of in-sourcing of manufacturing so as to respond to changes in demand, aiming to improve profitability.
As a result of the above, despite factors such as the impact of production adjustments in some areas of the construction machinery sector, net sales in the fiscal year reached 265.4 billion yen (increase 2.9% YoY), due to a recovery and expansion of sales for machine tools and bearings on the back of a recovery in automobile production, strong demand in the industrial machinery and retail sectors, and a recovery in equipment demand. This includes domestic sales of 125.3 billion yen (increase 3.1% YoY) and overseas sales of 140.0 billion yen (increase 2.7% YoY).
In terms of profitability, we have worked on transferring raw material price increases onto sales prices, automating and streamlining the operations of production lines, and reducing procurement costs, and the yen exchange rate is weakening. However, due to an increase in fixed costs and the impact of soaring raw material and energy prices that have continued from the previousfiscal year, this fiscal year’s operating profit, ordinar y profit, and net profit at tributable to the parent company shareholders were 11.8 billion yen (decrease 30.3% YoY), 11.0 billion yen (decrease 35.5% YoY), and 6.4 billion yen (decrease 47.1% YoY) respectively.
Dividends
With regard to the year-end dividends, considering the profit status and future business developments,we have decided to allocate 110 yen per share.
Future Initiatives
Regarding the future business environment, the outlook is generally difficult to forecast. In the automotive sector, which is the Group’s main business area, production is recovering. However, in the industrial machinery, construction machinery and retail sectors, demand recovery is delayed due to economic stagnation in China and Europe, and raw material and energy prices remain high. Furthermore, in the automotive sector, which is moving in the direction of carbon neutrality, full-scale EV conversion and business restructuring are accelerating, while in the manufacturing sector (including industrial machinery), there is increasing demand for product development and productivity improvement through digital transformation and AI, and for responding to social and environmental challenges such as meeting SDGs.
In response to these major changes in the structure of industry, the NACHI-FUJIKOSHI Group will take advantage of our unique strength in having diverse business, technology, and production know-how, including robot technology, to shift to a business structure centered on EVs and industrial machinery, and to develop new business opportunities. In overseas markets, we will strengthen all aspects of our sales and service operations, manufacturing and procurement, and research and development to further improve our business performance. Along with this, we will stay focused on market trends and capture demand, strive to expand sales of competitive products and services that collaborate and bring together the technologies of all divisions, and improve productivity through automation and streamlining. Furthermore, with the goal of achieving sustainable business growth, we will commit to challenges such as the environment, society, and governance through our business activities.
We would like to express our sincerest appreciation to all of our shareholders and other stakeholders for their continued support.
