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| Under the influence of the global economic downturn lingering from the previous year, NICHIDAI experienced a substantial decline in sales and recorded net loss for the year ended March 2010. It is with deep regret that we must inform you that we have decided to omit the year-end dividend for the current year as we announced in the interim period. We earnestly hope that you will kindly understand. As the economy is showing clearer signs of turnaround, we will devote all our effort to return to a growth path in the next year. |
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Born in 1955 in Yamanashi Prefecture. Graduated from the Department of Sociology, Hitotsubashi University.
Joined the Company in 1998. After experiencing General Manager of General Affairs, and General Manager in charge of Sales Coordination, elected as a director in 1999. Appointed as a representative director and Vice President in 2001.
Took office of President and CEO, a representative director in April 2002. |
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We answer the questions from our shareholders. |
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Please tell us about your business results for the current year (from April 2009 through March 2010; hereinafter, current year). |
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The Company increased sales after bottoming out in the first quarter, and regained profitability in the fourth quarter on an ordinary income basis. |
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The current year recorded consolidated net sales of 6,887 million yen (down 33.7% year-on-year), consolidated operating loss of 412 million yen, consolidated ordinary loss of 419 million yen and consolidated net loss of 450 million yen. In the first half year, we were preoccupied with responses to deal with a sharp drop in demand in the automobile industry caused by the long-term economic stagnation continuing from the 2008 Lehman Shock. Entering the second half year, however, each of our business segments is turning for the better while assuming different complexions. Consequently, looking at ordinary income on a quarterly basis, the Company posted loss from the first quarter to the third, ended up with an ordinary income of 45 million yen driven by a sales rebound in the fourth quarter.
By business segment, our flagship Net-Shape Business posted sales of 4,103 million yen (down 34.2% year-on-year). Sales plunged in the first half year, but marked a positive growth in the second half owing to an upturn in order placements from the Japanese key users accompanying an increase in the number of cars sold under the new car subsidy program, as well as a growth in demand for Korea, China and other Asian markets.
As for the Assembly Business, a substantial decline in turbocharger parts sales affected by the flagging European automobile market, or our primary destination, pushed down sales for the segment to 1,847 million yen (down 34.3% year-on-year). Meanwhile, NICHIDAI (THAILAND) LTD., an overseas production base of this segment, started mass production in the fourth quarter according to the original plan.
In the Filter Business, sales fell to 937 million yen (down 30.6% year-on-year) due to such factors as a decline in the private sector's motivation to invest in the domestic market and the sluggish oil drilling filters. For the whole year, the Company secured operating income of 46 million yen (down 64.4% year-on-year) as a result of an increase in sales of the new products destined for the healthcare industry, which made up for decline in sales for the segment. |
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■Trend in operating results on quarter basis (Consolidated) |
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■Segment Net Sales |
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What is your business strategy in the next year and thereafter? |
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In line with the Company's management policy "Thorough customer satisfaction", we will be committed to technological development and business globalization to advance corporate reform. |
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Although the automobile industry, the primary customer industry of the Group, has unknown consequences, its future path is getting clear. There is a movement that the whole industry is transforming from a sizeable drop caused by the year-old recession to a full-fledged recovery. However, things are changing much faster than before.
In order to match such customer trend with sure-footedness, the Group will work on "Advancing technological development" and "Coping with globalization," with "Thorough customer satisfaction" held up as our policy from the next year, and will press ahead with the reform of directors, job titles and personnel organization.
Explaining the technological development, in response to dissemination of hybrid vehicles and electric vehicles, which are expected to account for a maximum of approximately 18% of the domestic market in the next 10 years, we will newly set up development section next year so we can carry out development of products that keep pace with the changes in power train and of new applications for other than the automobile filed.
We will also enhance our global business operation centered on the fast-growing Asia region by leveraging existing bases of each business segment. Particularly in the Net-Shape Business, we will launch precision-forging business with our proprietary technologies as the core, and start high-volume production of forged parts in a manner that covers a series of process, from development, die design to manufacturing, to reinforce the global operation. |
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Please tell us about your business forecast for the next year onward. |
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We expect moderate growth in the first half year, and full-fledged recovery in the second half year. |
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With regard to the Net-Shape Business, we expect sales to grow due to full-scale recovery in demand for dies for our key users in the second half year in the Japanese market, along with the start of mass production of forged parts for American parts manufacturers in the overseas market.
In the Assembly Business, at the backdrop of the European automobile market revival and rising demand for emerging markets, NICHIDAI (THAILAND) LTD. is projected to start high-volume production of turbocharger parts on a full-fledged scale.
As Japan's private investment slump and the slack oil drilling market, the primary delivery destination of THAI SINTERED MESH CO., LTD., are predicted to continue for a while, in the Filter Business we will develop new applications and overseas markets with a focus on Asia to offset decline in existing demand. Additionally, as we did in this year, we will engage in cost-cutting activities across the board.
In light of the above, we forecast net sales of 9,000 million yen (up 30.7% year-on-year), operating income of 300 million yen, ordinary income of 200 million yen and net income of 150 million yen for the next year. |
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■Future Policies by Business Segment |
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Promotion of technological development |
Response to global business operations |
| Net Shape |
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Pursue growth strategy with precision-forging technology, including mass production of forged parts, as the core. → Launch forged parts mass production business. |
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Establish a precision die market targeting EV and other than automobile markets. → Set up a development section in the next year. |
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In view of future overseas operations, improve QCD (Quality, Cost and Delivery time) by reviewing the entire value chain associated with precision forging. |
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| Assembly |
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Clarify the position of companies in Japan as new business development bases. |
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Work on the development of method by utilizing plastic forming technology for turbocharger parts. |
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Strengthen cooperation with NICHIDAI PRECISION CORPORATION in tandem with the shift of mass production base to NICHIDAI (THAILAND) LTD. |
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| Assembly |
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Create new products, new applications and new markets. → Respond to exhaust gas filters etc. |
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Promote Asian strategy centered on THAI SINTERED MESH CO., LTD as a base. → Expand products other than oil drilling filters. |
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What about dividends? |
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We plan to pay total annual dividend of 6 yen, interim dividend of 3 yen and year-end dividend of 3 yen. |
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We makes it a fundamental principle to maintain stable dividends while securing internal reserve necessary for future business evolution and strengthened financial and business position, with profit return to our shareholders placed as a key management policy.
Therefore, we adhere to the policy which our eyes are set on faithfully implementing business strategies toward business turnaround and on resuming dividend payment in the shortest possible time.
Under such dividend policy, we plan to deliver an interim dividend of 3 yen and a year-end dividend of 3 yen, which brings total annual dividend to 6 yen.
The NICHIDAI GROUP will ensure execution of the reform and other measures and improve its business performance with utmost effort. We truly appreciate your kind understanding and assistance. |
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■Dividens per Share |
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