Message for Shareholders and Investors
Although the group formulated a five-year medium-term business plan beginning in FY 2016 and was working toward its achievement, as it has become apparent that business results will substantially differ from initial targets, performance goals for the final fiscal year and the initiatives to achieve them have been revised, and the “Notice of Revision of Medium-Term Business Plan” was announced on August 8, 2018. Specifically, the period until the final fiscal year has been positioned as a transitional period toward a new growth stage, and emphasis has been placed on changing the business portfolio and enhancing operational effectiveness, with “expanding growing markets,” “stopping the down trend of sales of printers in the sign market,” and “improving profitability” as key issues. Among these, in “expanding growth markets,” fields of focus have been revised and reselected to the three businesses of the “DP (Digital Printing) Business,” the “COTO Business,” and the “DGSHAPE Business,” and business operations have begun. By further clarifying focus areas and allocation of management resources and swift business operations with speedy decision-making that accurately grasp market changes, the group will work to expand growth areas and create new markets.
As a result of these initiatives, sales of printers mainly for the sign market decreased, and net sales for the six months ended June 30, 2019 decreased by 4.8% to 19,958 million yen. Cost of sales was on par with the same period of the previous term. Selling, general and administrative expenses were lower than the same period of the previous term, mainly due to lower personnel expenses. As a result, operating profit decreased by 12.0% compared with the same period of the previous term to 1,567 million yen, and ordinary profit decreased by 8.9% compared with the same period of the previous term to 1,483 million yen. Due to a decrease of income taxes – deferred and the negative effect of recording extraordinary losses including the disposal of software assets and loss on sales and retirement of non-current assets in the previous term, profit attributable to owners of parent was 1,070 million yen, increasing by 2.6%.
Regarding the outlook for the fiscal year, sales are expected to decline slightly from the previous fiscal year. Profits are expected to decrease owing to increases in R&D expenses for strengthening technical capabilities and expenses for proactive promotion activities aimed at expanding businesses in growing markets, as well as the assumption of a stronger yen compared to the previous fiscal year.
We believe in prioritizing profit returns for shareholders, and therefore we will work to maintain the stability of those returns in light of our performance. In terms of actual policy, we will aim for a dividend payout ratio of 30% by reviewing policies and returning profits based on performance, while also taking into account the future of our business development. In terms of dividends in the FY2019, interim payout is 25 yen per share and year-end payout is expected to be 25 yen per share based on the above basic polity.
We look forward to your continued support and guidance as we move forward together.