Message from Top Management
During the first half of this fiscal year, the global economy witnessed sluggish growth in capital investment demand. This was particularly noticeable in the manufacturing industry due to a significant delay in economic recovery within the Chinese market, which was severely impacted by last year's COVID-19 disaster. Compounding this were the concerns about economic recession in Europe and the Americas. Factors such as rising energy, raw material costs, and exchange rate fluctuations continued to exert pressure. Despite normalization of production within key customer industries like automobiles and semiconductors, there has yet to be a significant rebound in capital investment demand.
In this economic environment, MISUMI Group is leveraging its unique Business MODEL, which encompasses manufacturing and distribution businesses. By advancing the business foundation that supports these businesses globally, we are contributing to industries related to automation demand, particularly the manufacturing industry, by responding to customers’ needs for reliable and quick delivery. Utilizing the robust business foundation of IT, production, logistics, and our global network of locations, we have made efforts to capture customer demand accurately. Our new business policies, including developing new products and services aimed at sustainable growth, have progressed primarily according to plan. On the other hand, due to sluggish investment demand, Japan experienced a slight decrease compared to the previous year, while overseas regions saw a decrease in revenue compared to the previous year.
Consequently, despite the effect of favorable exchange rates, our consolidated net sales totaled ¥180,094 million (4.3% decrease year-on-year), due to a slowdown in demand. By segment, the FA business was able to maintain the same level of sales in Japan as in the previous year, but capital investment demand was generally sluggish in overseas regions, particularly in China, resulting in sales of ¥57,895 million (5.7% decrease year-on-year). The Die Components business is seeing normalization in production for automotive customers, but capital spending remains low. While sales have increased in Asia and Europe, they remain weak in other regions. As a result, sales came to ¥39,329 million (1.4% decrease year-on-year). The VONA business, although Japan, which accounts for a large share of sales, remained at the previous year's level, the slowdown in demand in China and Asia had a significant impact, resulting in sales of ¥82,868 million (4.6% decrease year-on-year).
In terms of profit, due to decreased sales volume, lower capacity utilization, temporary inventory write-downs, and increased expenses related to implementing a new core IT system to innovate the Business MODEL, operating income was ¥18,515 million (31.2% decrease year-on-year), ordinary income was ¥20,007 million (27.3% decrease year-on-year). Net income attributable to the owners of parent was at ¥14,185 million (29.9% decrease year-on-year).
Anticipating future trends, the business environment is projected to experience a continued worldwide expansion in demand for automation, aimed at resolving social issues in the medium to long term. However, it's crucial to note that escalated geopolitical risks could further intensify regional supply chain blocs. Amid such circumstances, our company is committed to speeding up the establishment of ideal Business MODEL for each region and making relentless efforts towards securing stable growth in demand.
In the face of the ongoing uncertainty in the current fiscal year's business landscape, considering unique initiatives and the influence of foreign exchange rates, there is no alteration to our full-year consolidated earnings forecast compared to the announcement made on July 28, 2023.
As a primary initiative, we will start the sale of "economy products", which boast high price competitiveness, in Japan as early as possible. This step aims at capturing market share, drawing on our experience with the broadening customer needs in China and Asia. In Japan, we plan to roll out more products that are environmentally friendly and demonstrate strong price competitiveness.
The "meviy" service, which enables instant quotes and shipment in as little as one day by simply uploading product design CAD data, is accelerating sales growth globally by continuously expanding products and services that adapt to customer needs in each region. In addition to 3D CAD data, we have begun to support 2D drawings, which account for about 40% of machine parts procurement, with the aim of further penetration.
In terms of strengthening our Business Foundation, we are renewing our core system in preparation for future growth acceleration, and we expect to complete its implementation in Japan this fiscal year.
The Company is implementing growth investments and returns to shareholders with a balanced approach from a medium to long-term perspective. Regarding dividends, we consider factors such as expanding the management foundation, strengthening financial health, and improving capital efficiency. The dividend payout ratio is determined based on a standard of 25%. Accordingly, the dividend per share at the end of the first half of this fiscal year was 12.60 yen (a decrease of 5.20 yen year-on-year). As the consolidated performance forecast for the fiscal year ending March 2024 has remained the same, we have revised our forecast for the year-end dividend to 14.50 yen per share (an increase of 2.16 yen year-on-year). The annual dividend forecast stands at 27.10 yen per share (a decrease of 3.04 yen year-on-year).
Dividend per share (Yen)
Representative Director and Chairman
Representative Director and President