Message from Top Management
The global economy during FY2019 was mired by harsh circumstances, namely the prolonged US-China trade conflict causing restraint on capital expenditures and operation; in addition to the impact caused by the spread of COVID-19 pandemic around the fiscal year end period.
Under such environment, with the highest priority being placed on ensuring the health and safety of our employees, MISUMI Group set up a response task force headquarter, monitoring the health status of our global employees and their families on a daily basis. In the meantime, we are fulfilling our supply responsibilities to our customers with best endeavors, in terms of production, logistics and customer support. In addition, innovations to our business model was sought by continuing to carefully select themes for making investments geared towards strengthening the IT and logistics infrastructure. Meanwhile, cognition expanded among customers of meviy, an innovative parts procurement service and RAPiD Design, a design support tool for accelerating response capability towards digital manufacturing. In the distribution business, we met customer needs by expanding product lineup globally and rolling out half-day delivery service throughout most of Asia.
Despite our efforts, consolidated net sales decreased 5.6% year on year to ¥313.3 billion due to the slowdown in demand for production equipment and operations in Japan, a notable decline in demand in the Chinese market at the end of the fiscal year, and the slump in the automotive industry in North America and Europe throughout the year. Operating income was ¥23.6 billion, a decrease of 25.8% year on year, due to decrease in sales volume and continued upfront investments which are carefully selected for sustainable growth. Ordinary income was ¥23.2 billion (26.9% decrease year on year), and net income attributable to owners of parent was ¥16.5 billion (31.3% decrease year on year).
With respect to shareholder return policy of MISUMI Group, we have set a dividend payout ratio at 25% by comprehensively taking into account of our business environment, business performance trends and outlook, as well as the expansion of management structure to achieve sustainable growth and corporate value enhancement, strengthening financial structure and capital efficiency. Based on the payout ratio of 25%, the year-end dividend per share for FY2019 was ¥7.04 (a decrease of ¥3.95 year on year), together with the interim dividend per share of ¥7.51, annual dividend was ¥14.55 (a decrease of ¥6.65 year on year).
With respect to the consolidated business forecast for FY2020, it is necessary to scrutinize what impact the COVID-19 pandemic will have on investment demand in the manufacturing industry as well as customers’ operations in each country. For the time being, it is difficult to make a rational calculation, and therefore pending. Going forward, we will disclose consolidated business forecast as soon as practicably possible, when such calculations become possible.
MISUMI Group is leveraging its unique business model, which encompasses both manufacturing and distribution businesses, to strengthen our reliable and quick delivery by enhancing response capabilities towards IT and the manufacturing industry as well as to build an e-commerce model optimized for the manufacturing industry.
Simultaneously, we are focusing on responding to current environmental changes and fulfill our responsibility to supply products. Our customers, besides automobiles and electronics related, include many lifeline-related industries such as medical devices, pharmaceuticals and food manufacturing. We believe it is our social responsibility to supply products to these customers. When the operation in China faced temporary suspension around the year end of FY2019, we were able to leverage our 5-pole global production system to reorganize the supply chain in a timely manner and supply products from Japan and Vietnam. By responding to supply requests in each region with best endeavors to fulfill our responsibility as a “behind-the-scenes supporter for the manufacturing industry,” we received positive evaluations from our customers for how quickly we restored the supply network.
This solid business foundation has been built through various initiatives and investments conducted over a long period. In FY2019, we migrated the IT system to a cloud network, newly established the Central Japan Distribution Center, relocated and expanded the East Japan Distribution Center. On the other hand, investment for expanding production capacity has been restrained.
We will respond fully to customers’ needs for reliable and quick delivery under various circumstances, expand our global customer base and aim to accelerate growth when business conditions recover.
Representative Director and Chairman
Representative Director and President