Message from the President

As of March 31, 2022

All NICHIDAI Group start transformation. The New medium-term strategy/Naoki Ito President

Figure: NICHINOVATION~2026~

Performance overview

The business environment is still harsh

In the first half of the fiscal year ending March 2022, the Japanese automobile industry, which is the Group's main customer industry, showed a tendency to recover from the stagnation caused by the spread of the COVID-19. However, since the second half of the year, automobile production has stagnated all over the world due to the shortage of supply of semiconductors and parts. As a result, in The Net-Shape Business, although sales remained at a level higher than the previous year in the first half of the year, sales were sluggish in the second half of the year. In addition, considering the situation in which The Assembly Business is sluggish due to the stagnation of the automobile industry, we examined the recoverability of fixed assets in this business and recorded an impairment loss of 717 million yen.

The modulation and technological shifts in the automobile industry accompanying the spread of the new coronavirus infection in recent years are affecting the demand for automobile parts related to internal combustion engines. In the European region, which is the main market for turbochargers, policies aimed at the conversion to electrification of automobiles are being strongly promoted, and the impact is becoming clear. Under these circumstances, turbocharger parts in The Assembly Business cannot be expected to grow at a high rate, but the challenge is to receive new demand in anticipation of the recovery of automobile production.

On the other hand, in The Filter Business, which is mainly outside the automobile industry, sales remained strong, centered on products for overseas markets, and sales exceeded the previous year's level. In response to the above results, consolidated sales of 12,301 million yen (up 13.7% year-on-year), Operating income of 217 million yen (operating loss of 339 million yen in the same period of the previous year), and Ordinary income of 264 million yen (ordinary loss of 173 million yen in the same period of the previous year), Net loss attributable to owners of the parent company 619 million yen(compared to 170 million yen net loss attributable to owners of the parent company in the same period of the previous year).

Outlook for the next term

The situation will continue to be unpredictable

The international situation remains unstable due to the prolonged infection with the new coronavirus and the Ukraine problem, and the Japanese automobile industry is having a quantitative impact such as a decrease in sales volume. The Group's business performance is expected to recover from the second half of the year as automobile production, which was forced to suspend due to a shortage of semiconductors and parts, is expected to move to normal, but the future outlook remains unpredictable.

Considering the business environment and market conditions, the forecast for consolidated financial results for the fiscal year ending March 2023 is sales of 12,200 million yen (down 0.8% from the same period of the previous year), Operating income was 310 million yen (up 42.7% year-on-year), Ordinary income was 300 million yen (up 13.3% year-on-year), Net income attributable to owners of the parent company 200 million yen (net loss attributable to owners of the parent company of 609 million yen in the same period of the previous year).

The fiscal year ending March 2023 will be the first year of the NICHIDAI Group's transformation.

The Group positions the return of profits to shareholders as an important management policy, and has a basic policy of maintaining stable dividends while securing necessary internal reserves for future business development and strengthening of the management structure. Based on this basic policy,dividend changed year-end dividend of 5 yen to 3 yen, which is a 2 yen reduction from the initial plan. Combined with the interim dividend of 5 yen, the annual dividend was being 8 yen.

The dividend for the next fiscal year is expected to be 8 yen per year, 4 yen for the interim and 4 yen for the end of the fiscal year.

Factors that have a major impact on the Group's management are the wave of changes in the automobile industry and technological changes. In order to respond to this change in the business environment, the Group has renewed its "medium-term management strategy" and has begun efforts for change. We will proceed with research and development in various fields and lay the groundwork for the future. At the same time, we will foster a corporate culture in which employees can play an active role and cultivate the driving force for creating innovation. Positioning the next fiscal year as the first year of reform of the Group, we have renewed our determination to build "Nichidai that continues to grow" so that we can enjoy the fruits together with our shareholders. We will continue to work together as a group, and we ask for the continued guidance and encouragement of our shareholders.

Comparison of full-year sales and ordinary income

It has recovered to the level before COVID-19, but it has not reached the previous level yet.

Graph: Fiscal Year, Net sales, Comparison
Graph: Fiscal Year, Ordinary income, Comparison

Overview by Segment

Graph: Overview by Segment

The Net-Shape Business

Graph: Net sales, Ordinary income / Income ratio

* Rounded down to the nearest million yen

Performance overview

In the Japanese automobile industry, which is a major customer industry, sales volume increased in the first half of the year compared to the same period of the previous year, and The Net-Shape Business also performed steadily. However, in the second half of the year, the shortage of parts such as semiconductors and the re-expansion of infection due to the epidemic of the new coronavirus mutant became noticeable, and the automobile industry stalled due to the stagnation. As a result, sales were 6,179 million yen (up 23.1% year-on-year) and ordinary income was 65 million yen (ordinary loss of 344 million yen in the same period of the previous year).

Outlook for the next term

In The Net-Shape Business, which is closely related to the automobile industry, although the impact of stagnation in automobile production will occur in the first half of the year, automobile production is expected to recover and sales of new precision forged products are expected to increase from the second half. Therefore, we plan to achieve sales of 6,750 million yen (up 9.2% year-on-year).

The Assembly Business

Graph: Net sales, Ordinary income / Income ratio

* Rounded down to the nearest million yen

Performance overview

In The Assembly Business, although it has recovered from the sharply sluggish level of the previous year, sales fell sharply in the second quarter due to the stagnation of automobile production due to the shortage of parts supply as in The Net-Shape Business. As a result, net sales were 3,708 million yen (up 6.1% year-on-year) and ordinary loss was 113 million yen (ordinary loss of 158 million yen in the same period of the previous year).

Outlook for the next term

Due to the increasing uncertainty of the world economy due to the destabilization of the international situation such as the Ukraine problem, we plan to achieve sales of 3,000 million yen (down 19.1% from the same period of the previous year).

The Filter Bussiness

Graph: Net sales, Ordinary income / Income ratio

* Rounded down to the nearest million yen

Performance overview

In The Filter Business, domestic sales remained at about the same level as the previous year, while overseas products remained strong, and sales exceeded the initial plan. As a result, net sales were 2,413 million yen (up 4.6% year-on-year) and ordinary income was 312 million yen (down 4.7% year-on-year).

Outlook for the next term

In The Filter Business, despite the uncertain global economic situation, relatively stable demand is expected both in Japan and overseas, so we anticipate that we will steadily capture orders and maintain sales. Sales are planned to be 2,450 million yen (up 1.5% year-on-year).

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