Determinedly Taking on the Challenge of Change and Accelerating Growth in Profits
President & Representative Director, CEO
Atsushi Tokushige
Review of the Fiscal Year that Ended March 31, 2024
In the fiscal year that ended March 31, 2024, customers and commercial rights expanded, but sales in the EC Business decreased from the previous fiscal year due to stagnation in the Chinese market and the impact of the shift to direct sales by some semiconductor manufacturers. In contrast, the CN Business reported an increase in profit due to strong sales of security-related products and subscription-based licenses and services. For the fiscal year that ended March 31, 2024, the Group posted net sales of ¥242.888 billion (up 1.1% year on year), operating income of ¥15.428 billion (up 8.4% year on year), ordinary income of ¥13.922 billion (up 11.6% year on year), and net income attributable to owners of parent of ¥9.986 billion (up 13.8% year on year). Net sales and profits reached record highs.
Under the VISION 2025 medium-term management plan, we have achieved the targets (net sales of ¥200 billion ±10%, an ordinary income ratio of 5.0% or higher, and an ROE of 15.0% or higher) for two consecutive fiscal years since the fiscal year that ended March 31, 2023. We have met the forecasts for the ordinary income ratio and ROE for the fiscal year ending March 31, 2025 (net sales of ¥250 billion, an ordinary income ratio of 5.5%, and an ROE of 20.0%) that were announced in April 2023, one year ahead
of schedule.
We took over the wafer inspection system business of Nippon Electro-Sensory Devices Corporation in October 2023. That has also contributed to our performance, and figures are included in the Electronic Components (EC) Business.
Forecast for the Fiscal Year Ending March 31, 2025
With regard to the business environment for the CN Business in the fiscal year ending March 31, 2025, the IT market mainly involving security is expected to remain strong. For the EC Business and PB Business, market adjustment is expected to continue, with the first half of the year being the bottoming out phase and the second half of the year shifting to a recovery phase. The main reason for this is that the market has been in an adjustment phase since the second half of the fiscal year that ended March 31, 2024, and consumption of inventory in the supply chain is taking time. The prolonged stagnation of the Chinese market in particular is widely affecting the area of industrial equipment, which is a core customer base for us. In addition, the impact of decreased sales due to the shift to direct sales by some semiconductor manufacturers will become most evident in the first half of the fiscal year, but the contribution of new customers and commercial rights to our business performance is expected to begin in earnest in the second half of the fiscal year.
Based on these assumptions for the business plan, we plan to have net sales of ¥230 billion (down 5.3% year on year), ordinary income of ¥12.7 billion (down 8.8% year on year), and net income attributable to owners of parent of ¥8.7 billion (down 12.9% year on year) for the fiscal year ending March 31, 2025. Performance will fall below the results for the fiscal year that ended March 31, 2024, but we expect to exceed the VISION 2025 targets for three consecutive fiscal years since the fiscal year that ended March 31, 2023. We will continue to promote efforts to grow profits with an eye toward medium- to long-term growth.
Our New Medium-Term Management Plan, VISION 2030
The financial indicators in the current medium-term management plan, VISION 2025, have been achieved for two consecutive fiscal years, but we have not necessarily realized or achieved our vision of “to become a manufacturer with technology trading company functions.” We need to focus more on this and continue our commitment to “become a manufacturer.” Therefore, we have formulated a new medium-term management plan, VISION 2030, in order to increase corporate value and for the Group to continue making progress.
VISION 2030, New Medium-Term Management Plan
(FY2026–FY2030)
MISSION
To address social issues through leading-edge technology,
primarily semiconductors and IT, and to contribute to the sustainable development of society
by offering solutions to those issues that have value beyond expectations
The Group will continue to address continuously emerging social issues from the perspective we have developed as a technology trading company. By providing solutions with value that exceeds the expectations to society (our customers), we will encourage the adoption of cutting-edge technologies and help to create a “super-smart society.”
VISION
A company that solves latent social issues
with the capabilities of a manufacturer and a technology trading company
Under the current medium-term management plan, VISION 2025, we have focused on enhancing our functions as a manufacturer to provide solutions to issues based on our Vision of “becom[ing] a manufacturer with technology trading company functions.” Numerous issues that involve every market, as exemplified by advances in AI, are expected to arise by 2030. We will need to fully utilize both our “functions as a manufacturer” and our “functions as a technology trading company” more than ever before. In our new medium-term management plan, VISION 2030, we have updated our Vision to be “a company that solves latent social issues with the capabilities of a manufacturer and technology trading company” in order to reaffirm to our stakeholders that the Group will pursue solutions to the aforementioned issues based on both our “functions as a manufacturer” and our “functions as a technology trading company.” Our firm commitment to sustainably increasing profitability by enhancing our functions as a manufacturer has not changed.
Companywide Policy
Aim to solve latent social issues (customer issues) with the capabilities of being a manufacturer and technology trading company
- All business units will work on in-house products (services) development and create Group synergies to propose solutions to problems with value that exceeds expectations
- The Technology Trading Company Department will acquire new distributor agreements and customer commercial rights to strengthen marketing to address potential issues
- Actively utilize M&A to quickly establish a business foundation that enables problem-solving
Take actions that contribute to sustainable profit growth
- Actively invest in in-house products (services) development that can differentiate the Company’s products.
- Transition from a flow-type to a stock-type service business
- Invest to increase medium- to long-term profit research and development, human resources recruitment, employee training, etc.)
Management Policy by Business
-
- Understand customer needs and offer solutions and services that support customer’s DX
- Support customer’s use of digital technology and increase customer satisfaction
-
- Focus on growth markets such as industrial equipment, automotiverelated equipment, cloud services, and the OT security*1 field
- Leverage specialized semiconductor knowledge and develop a solutions-based business
-
- Provide products centered on wafer inspection systems globally with measurement and inspection technology at the core
- Strengthen medical ODM*2 and board OEM*3 services by leveraging semiconductor-related technology and high-quality development and manufacturing infrastructure
*1. Security for operational technology used in factories and industrial facilities
*2. Original design manufacturing: A model where a company handles everything from product design to manufacturing
*3. Original equipment manufacturing: In contrast to ODM, a model where a company is only commissioned or contracted to produce a product
Financial Model (Target Management Indicators)(for FY2030)
Pursuing Sustainable Profit Growth with Profit and Revenue Growth (Profit Growth Outpacing Revenue Growth)
| Net sales |
¥300.0 - ¥350.0 billion |
| Ordinary income ratio |
≧8% |
| ROE |
≧20% |
Capital Policy
In order to further increase corporate value through sustainable growth in profits, there are three important elements of our capital policy: investment in growth, shareholder returns, and financial soundness.
Sustainability
We intend to help people live fuller lives and to develop a sustainable society through the various solutions we provide through our businesses. We also intend to facilitate the Group’s sustainable development and to increase corporate value by working to address material issues. In terms of human capital and diversity in particular, we will focus on fostering the next generation of leaders, in addition to training human resources who seek to satisfy customers around the world and creating an environment that fosters individual capabilities to help increase employee motivation. In order to achieve carbon neutrality in FY2050 as a response to climate change, we have set a target for FY2030 (a 50% reduction compared to FY2021). As part of this effort, we switched to electricity from virtually renewable energy sources at our Engineering Center (Tsuzuki Ward, Yokohama) in October 2023.
Enhancing Corporate Governance
We have introduced a new corporate officer system and we have created the new position of Chief Executive Officer(CEO) to clarify who is responsible for the Group’s management and conduct of operations. As the highest executives in the Group, corporate officers have a company-wide perspective and are responsible for management and conduct of operations. In addition, corporate officers will further enhance the supervisory capabilities of the Board of Directors by attending Board of Directors meetings to explain proposals and answer questions. Corporate officers are members of the Corporate Officer Committee, which is a newly created supreme body for executive decision-making. Corporate officers are responsible for prompt decision-making and the agile conduct of operations.
Message to Stakeholders
VISION 2025 is the medium-term management plan that ends in the fiscal year ending March 31, 2025. The plan has made steady progress, surpassing financial indicators and meeting the final-year forecast for the ordinary income ratio and ROE in the fiscal year that ended March 31, 2024. The fiscal year ending March 31, 2025 will be an adjustment phase, but we expect growth in the semiconductor market, security market, and IT market within the context of rising demand for a DX, EVs, and AI in the medium to long term. We continue to believe that developing flexible solutions and responding quickly to
customer needs are essential. We will further increase our efforts to grow profits in the future, and we will seek to continue increasing corporate value. We would like to thank all of our stakeholders for their continued support.
July 2023
