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Management Information

President  Jun Kato/Chairman of the board Sakurai Satoshi

We have developed the Medium-term Business Strategy “elematec NEXT”

I would like to express my sincere gratitude to all of our shareholders for their continued support.

Financial results for the 74th fiscal year (from April 2019 to March 2020) and business environment

During the period under review, the electronics industry saw sluggish levels of electronic component production, which were mainly due to cutbacks in capital investment caused by growing uncertainty over the future of the global economy and the delayed recovery of automobile and smartphone production overseas.

Under these circumstances, the Elematec Group has promoted initiatives to increase added value by engaging in the original design manufacture (ODM) business, where our company is active in all aspects from design to the production of products under other companies’ brands (our company outsources production to vendors), in addition to providing module products which combine multiple products. By sector, in the automotive-related business, where the focus has been placed, mainly orders for drive recorders as well as sales of products for electric and hybrid vehicles, remained particularly robust. The medical equipment-related business also remained strong, as can be seen from the acquisition of orders for new models, which is attributed to the effects of activities conducted over the years. Meanwhile, the smartphone-related business remained stagnant, due partly to the growing presence of manufacturers with Chinese capital, despite growing expectations of a market recovery overseas driven by the start of sales of 5G-compatible products.

As a result, the Elematec Group recorded negative growth in net sales for the period under review. All income line items also showed negative growth in line with the decrease in net sales.

The year-end dividend for the period under review is 15 yen per share based on the basic policy of maintaining a (consolidated) payout ratio of 40% or more. Together with the interim dividend of 17 yen per share, the annual dividend is 32 yen per share.

Medium-term Business Strategy “elematec NEXT”

The Elematec Group launched the Medium-term Business Strategy “elematec NEXT” in FY2020. We recognize that the Elematec Group is at a crossroads in an increasingly competitive electronics industry. By viewing major changes in the market environment, including the widespread use of 5G, as opportunities for growth, we will comprehensively execute “elematec NEXT” with renewed resolution.

The global spread of the new coronavirus(COVID-19) infection has had a major impact on the business activities of the Elematec Group. While the uncertain business environment is expected to continue into the future, there are also positive developments, including an increase in orders for robots, products handled by our company, to reduce risks related to the infection.

The Elematec Group as a whole will make determined efforts to overcome this challenging situation and enhance corporate value by leveraging the strengths of its broad product lines and customers, as well as mobility to the fullest.We ask for your continued understanding and support.

June 2020

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