We would like to take this opportunity to thank you for your continued support.
TOMOEGAWA Group’s current priority is on the accomplishment of new “5 year Medium-Term Management Plan” that started from FY2022 and will end in FY2026. Under that plan, re-evaluation of business portfolio and structural reform are being conducted to improve our financial structure.
In FY2023, the second year of the Medium-Term Management Plan, we were able to significantly exceed the initial plan and achieve the consolidated operating income, which was planned for the final year of the Medium-Term Management Plan (FY2026). This was due to better-than-expected earnings improvement from structural reforms, the Toner business continuing its strong performance from FY2022 and the positive effect of yen depreciation on earnings, and the Semi-conductor-related business performing well until the middle of the year.
Based on these results, we have reviewed the Medium-Term Management Plan.
By steadily implementing this review plan, we aim to achieve the consolidated net sales of 40 billion yen and operating income of 3.5 billion yen in the final year (FY2026) of the plan by channeling earnings generated from businesses with a solid foundation, such as toner and semiconductor mounting tapes, into investments in growth areas such as semiconductor-related businesses and functional non-woven fabrics businesses. In addition, we will strive to achieve a return on equity (ROE) of 15.5% as a management indicator to be targeted, as we believe that conducting business operations with an awareness of financial leverage while maintaining financial safety will contribute to maximizing corporate value.
We look forward to your continued support in the future.
Observation of whole FY2023 (April 2022 to March 2023)
FY2023 consolidated net sales reached ¥34,170 million, up ¥1,384 million or +4.2% from last FY number.
As for the profit, the consolidated operating income was ¥2,052 million, up ¥69 million from last FY number. Semiconductor market conditions began to adjust in the latter half of the period, resulting in a deterioration of profit and loss in the Electronic Materials segment. In addition, income decreased due to higher raw material and fuel prices. Against these factors of decrease in profit, we thoroughly added the cost increase to the selling price in each business segment, and this was supplemented by the positive effect of increased income from overseas-related sales, mainly in the Toner business.
The consolidated ordinary income is ¥2,151 million, down ¥159 million from that of last FY, due to the decrease in the equity gain from an affiliated company that handles processing of optical film used for displays.
Net income attributable to owners of parent is ¥1,451 million, down ¥199 million from that of last FY. There was an extraordinary loss associated with the proactive disposal of underutilized or idle facilities in order to further improve productivity toward the end of the period.
The Projection of FY2024 (April 2023 to March 2024)
In the next fiscal year (FY2024), the third year of the medium-term management plan, the Toner business, which has driven the company's performance to date, is expected to be affected by continued inventory adjustments of some products for major customers and intensified price competition. Under these circumstances, the company will review its product mix and shift to higher-margin products. In addition, for the Semi-conductor and Display-related business, especially in the Semi-conductor-related business, we expect the adjustment phase to continue for some time, and the contribution of related new products will be delayed about a year longer than initially expected. On the other hand, in the Functional Sheet business, we will focus on expanding sales of various functional sheets, which have been growing especially since the second half of the FY2023.
In terms of profit, despite the expected increase in sales, we anticipate a temporary cost increase, including upfront expenses related to the launch of new products, mainly for semiconductor manufacturing equipment, and the impact of aggressive investments in human resources and the promotion of operational efficiency through the use of DX.
Based on the above, for the next fiscal year (FY2024), we aim to achieve the consolidated net sales of 36 billion yen, operating income of 1.5 billion yen, ordinary income of 1.5 billion yen, and net income attributable to owners of parent of 600 million yen.
President and CEO