Message for Shareholders and Investors
During the fiscal year ended December 31, 2016, the world economy was on a moderate recovery trend overall in developed countries such as the United States, Europe and Japan. However, the outlook remains uncertain due to various factors causing a risk of economic decline, including a deceleration in growth in emerging markets such as China, and stagnation of economies in resource-rich countries, in addition to high volatility in financial markets and heightened geopolitical risk.
Amid such conditions, the group formulated a five-year medium-term business plan beginning in FY 2016, and started implementation in the current term. The medium-term business plan emphasizes "GrowthOne: Sustainable growth through innovation" as the basic policy. By working toward the attainment of three major objectives, including (1) accelerating new business developments in growing markets, (2) transforming to a solutions provider, and (3) transforming into an innovation-focused group, we aim to create a high value-added company and achieve sustainable growth. During the fiscal year under review, in order to promote “accelerating new business developments in growing markets” as one of the major goals of the medium-term business plan, we focused on achieving new growth by offering original product creation in retail markets and textile printing in textile markets, in addition to dental milling machines in the dental (dental-medical) market. Despite steady achievement in expanding into new markets, sales for the fiscal year ended December 31, 2016 decreased by 6.2% over the previous term to 44,112 million yen, due to such factors as lower sales of printers for the sign market and the negative effects of foreign exchange. In terms of expenses, cost of sales rose by 1.7% from the previous year due to factors such as lower per-unit prices and higher R&D expenses. Meanwhile selling, general and administrative expenses decreased by 6.4% year on year due to efforts to reduce business expenses, although the ratio to sales was on par with the previous term. As a result, operating income decreased by 18.8% compared with the previous term to 4,359 million yen. Ordinary income decreased by 17.2% compared with the previous term to 4,105 million yen. Profit attributable to owners of the parent company was down 19.4% compared with the previous term to 2,706 million yen.
For the next term's business performance, we predict increased sales and profitability through our efforts to explore and deepen new growth markets, while working to strengthen the profitability of all our businesses.
We look forward to your continued support and guidance as we move forward together.