Achieving Medium- to Long-Term Growth with the Expansion of the Solution Proposal Business

During the fiscal year under review (ended December 31, 2024), Factory Automation (FA) products in the Industrial Automation (IA) business were impacted by restrained capital investment and inventory adjustments by customers due to the economic slowdown in the Chinese and European markets. However, the expansion of sales in the Sensing Solutions (SS) business, which boasts a high share of the niche market, drove performance. The effect of the depreciation of the yen also contributed to increasing consolidated net sales to 63.3 billion yen (up 12% year-on-year) and operating profit to 7.1 billion yen (up 21% year-on-year). Both of these figures were record highs.

For the next fiscal year, our plans take into account the uncertain economic situation and geopolitical risks, the delayed recovery of capital investment demand in the industrial automation sector, and the expected appreciation of the yen against other currencies. Meanwhile, the Group is building a system that enables it to quickly identify changes in the market environment through direct customer proposal activities (direct marketing). This will enable us to respond to the ever-changing market needs, provide appropriate solutions that focus on the real demands of our customers and develop a business with high added value, profitability, and continuity.

In addition, under our three-year management plan (2025-27), we plan to achieve an operating profit of 10 billion yen in FY2027. Sales of high value-added products, services, and systems through the Solution Proposal Business, a group-wide initiative, are steadily expanding, and the ratio of solution sales within the Group is increasing every year. The ratio was approximately 20% in the fiscal year under review, with a target of 30% by FY2027. Based on this initiative, we aim to further improve profitability over the medium to long term.

The Group determines dividends with a dividend payout ratio target of 30%, taking into account a balance between reinforcing the management fundamentals and maintaining a stable dividend. For the fiscal year under review, we paid interim and year-end dividends of 20 yen per share, for a total annual dividend of 40 yen per share.

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