To Our Investors
Message from the Representative
Thank you very much for your continued support of our company.
In the fiscal year ended March 31, 2017, we worked intensively to reform the business portfolio in our device business in order to achieve the goal of improving upon the low level of profitability. However, profits declined greatly due to factors including a reduction in handled products caused by changes in the product strategy of main suppliers and rapidly changing exchange rates.
Furthermore, the solution business also posted a decrease in earnings and profit when compared to the previous fiscal year. This was due to reduced net sales caused by subsiding in special demand toward the digitalization of wireless communication for firefighting and emergency services. As a result, we faced tough circumstances in our consolidated results, including posting an ordinary loss of 952 million yen.
In April of last year, the Group started the five-year medium-term management plan "V70 Medium-Term Management Plan" (final year: fiscal year ending March 31, 2021). Although we predict even more severe changes to the business environment in the future, we will formulate appropriate measures and the entire Group will work together to achieve the quantitative targets established in V70; specifically, "return on equity (ROE) of 5%" and "ordinary profit of 3,000 million yen.”
I look forward to continued support and guidance from our shareholders.
Representative Director, COO Toshiro Suzuki
Financial Highlights (The fiscal ended March 2017)
During the consolidated fiscal year under review, outlook of the global economy became increasingly uncertain for the reasons of Britain’s exit from the European Union, national election in European countries, and political management of the new administration in the U.S. The Japanese economy continued to be on a moderate recovery path, but lacked momentum due to sharp volatility and instability in currency movement in the exchange and financial markets, as well as concerns about an adverse affect by continued uncertainty of the global economy. The electronics industry, which is the primary area of business of the Group, saw stable growth in the markets relating to advanced operation support systems for automobiles, IoT (Internet of Things) and M2M (Machine to Machine). Meanwhile, in the domestic IT industry, services related to cloud computing and big data have become increasingly popular and there are reasons to expect them to find further use in businesses, so in this area, the Group operated in a comparatively favorable environment. Under these circumstances, we committed to strengthening business power and to improving the management foundation, as well as we strove to improve sales and profitability. However, during the consolidated fiscal year under review, business performance in the device business significantly deteriorated due to drastic fluctuation of exchange rates and a decrease in Group’s offering products resulted from change in product strategies by major suppliers, causing an overall downturn in consolidated results: net sales decreased by 15.8% to 167,654 million yen and operating profit fell by 58.0% to 804 million yen, all on a year-on-year basis. In addition, ordinary loss of 952 million yen was recorded (compared to a profit of 1,500 million yen in the previous term), and 1,575 million yen was recorded as net loss attributable to shareholders of parent company (compared to a profit of 977 million yen in the previous term). Consolidated performance by segment for the term under review is as follows.
|Net sales||(Millions of yen)||147,963||192,240||219,091||199,075||167,654|
|Ordinary income (loss)||(Millions of yen)||1,629||2,658||3,117||1,500||(952)|
|Net income (loss)||(Millions of yen)||1,131||1,806||2,003||977||(1,575)|
|Net assets||(Millions of yen)||59,916||62,255||65,619||63,385||61,537|
|Total assets||(Millions of yen)||82,916||93,522||101,672||95,580||94,144|
|Net assets per share||(Yen)||2,081.88||2,209.24||2,328.64||2,249.40||2,183.84|
|Net income (loss) per share||(Yen)||38.67||63.78||71.11||34.70||(55.90)|
|Return on equity(ROE)||(%)||1.9||3.0||3.1||1.5||―|
|Price earnings ratio(PER)||(Times)||16.2||10.8||14.0||25.6||―|
|Dividend per share(annual)||(Yen)||20||20||40||40||25|
Year Ending March 2018 Business Forecasts for the Full Year
|Net sales||185,000 million yen (10.3% increase over the previous year)|
|Ordinary profit||1,380 million yen ( ― )|
|Net profit||700 million yen ( ― )|
* The figures are announced on May 15, 2017. Please see the following article for further details.