We would like to begin this message by expressing gratitude to our shareholders and investors for their ongoing support.
1. Operating and financial review
During the first quarter of the fiscal year (from April 1, 2022 to June 30, 2022) under review, the global economy continued to experience a recovery, as restrictions on international/domestic movement and other factors imposed by the COVID-19 pandemic were gradually eased. On the other hand, the outlook remains uncertain due to factors such as rising inflationary pressure caused by soaring raw material and energy prices, increased difficulty in procuring components along with the lockdown in China, and rising interest rates and concerns about an economic recession in the West.
In this economic and business environment, the Daifuku Group has entered the second year of its three-year business plan, Value Transformation 2023. Under this business plan, while promoting DX² (DX Squared)*, the Group works on key measures in the areas of Business Domains, Operational Framework, Profitability, and Brand, with the aim of achieving the targets for the final fiscal year ending March 31, 2024.
*DX² (DX Squared) = Digital Transformation x Daifuku Transformation
During the first quarter, orders for cleanroom systems for the semiconductor sector significantly increased in Asia and orders for intralogistics systems, automotive systems and airport systems were strong. Sales were firm, underpinned by an extensive order backlog from the previous fiscal year, despite some projects affected by factors such as longer time required to procure components.
As a result, the Group received orders of 210,698 million yen, up 52.2% from the same period the previous fiscal year, which easily represented a new record high on a quarterly basis. In addition, the Group posted sales of 130,211 million yen, up 8.3%, achieving a new record high for the first quarter.
Income reflected the recording of value-added tax and other for a prior period as an extraordinary loss, in addition to soaring raw material costs and labor expenses.
Consequently, the Group posted operating income of 10,275 million yen, down 2.3% from a year earlier, and ordinary income of 10,541 million yen, down 2.9%. Net income attributable to shareholders of the parent company was 5,835 million yen, down 24.5%.
2. Outlook for the fiscal year ending March 31, 2023
|FY2021||FY2022 (Forecast)||Rate of change|
|Orders received||589.0 billion yen||630.0 billion yen||up 6.9%|
|Net sales||512.2 billion yen||565.0 billion yen||up 10.3%|
|Operating income||50.2 billion yen||56.5 billion yen||up 12.4%|
|Ordinary income||51.2 billion yen||57.5 billion yen||up 12.2%|
|Net income attributable to shareholders of the parent company||35.8 billion yen||39.6 billion yen||up 10.4%|
The above forecast values are our projections based on information available at the time of this release and contain various uncertainties. Actual results may differ materially from forecast values due to factors such as changes in the business performance of the Company.
3. Basic policy for dividends
Daifuku regards the return of profits to shareholders as its most important management task and has adopted a performance-based policy for cash dividends based on consolidated net income, with the aim of achieving additional profit distribution to shareholders. We appropriate the remaining surplus to internal reserves for future growth.
Under its three-year business plan Value Transformation 2023, Daifuku aims to achieve a consolidated dividend payout ratio of 30% or more on average for the three years and increase its corporate value through investment in growth. For the fiscal year ended March 31, 2022, the Company paid an interim dividend of 35 yen per share, and the Board of Directors passed a resolution to pay a year-end dividend of 55 yen per share at a meeting held on May 13, 2022, for an annual dividend of 90 yen per share, an increase of 5 yen per share from the initial plan. This represents a dividend payout ratio of 31.6%.
With respect to dividends for the fiscal year ending March 31, 2023, the Company plans to pay an annual dividend of 105 yen (an interim dividend of 40 yen per share and a year-end dividend of 65 yen) and a dividend payout ratio of 33.4%, taking into consideration the earnings forecast for the fiscal year ending March 31, 2023 and the basic policy described above.
We respectfully ask our shareholders and investors for their continued support.
Hiroshi Geshiro, President and CEO