Message to Investors
We would like to thank our shareholders for their continued support over the preceding year.
In 2017, the Tsubaki Group was proud to have marked the centennial of our Company. We are very grateful to our investors and customers for their contributions to our success over the past decades.
We remain committed to increasing our corporate value as we continue to grow as a manufacturing company.
Fiscal 2016 Business Performance
In fiscal 2016, sales in the Japanese market were sluggish, but they remained strong in international markets in general. As a result, consolidated net sales totaled ¥198.7 billion and operating income amounted to ¥21.6 billion (for an operating income ratio of 10.9%). Sales declined slightly due to the impact of the yen’s appreciation. However, operating income and profit attributable to parent company shareholders increased, reaching a record high. This result is attributable to the improved profitability of Chain Operations, mainly in Japan, as well as Materials Handling Systems Operations outside Japan.
Launch of Mid-term Management Plan 2020
In order to strengthen our potential for sustainable growth as a manufacturing company in the years following our centennial, our Group formulated Long-term Vision 2020 in fiscal 2014. This plan outlines the goals the Tsubaki Group should seek to achieve by fiscal 2020. In April 2017, we introduced Mid-term Management Plan 2020 as an action plan outlining the steps we must take to meet these goals. We have already begun to address issues that will enable us to focus on what our goals should be. In keeping with our policy of “Convert our corporate culture to a market-focused approach” and “Exercise comprehensive strengths of the Group”, we will emphasize the need to provide innovative services and develop and launch products closely attuned to market needs. We are committed to expanding our business by strengthening the synergies among our business groups, building on the concept of “One Tsubaki.”
Outlook for Fiscal 2017
Our forecast for consolidated operating results for fiscal 2017 is ¥205 billion in sales and ¥20.5 billion in operating income. Regarding our outlook for the economic environment in the current fiscal year, the domestic market is likely to remain steady while international markets are generally expected to exhibit strength. However, due to factors such as depreciation, material costs, and personnel expenses associated with an increase in global production associated with the Automotive Parts Operations, we forecast a year-on-year decrease in profits. To be clear, this is a minimum profit forecast that incorporates all negative factors. We will continue to seek out opportunities for cost reductions in each operation as we emphasize the need to strengthen profitability.
Looking Beyond Our Centennial
The Tsubaki Group has taken the opportunity presented by the commemoration of its centennial to reevaluate the company’s purpose: specifically, what we are doing and for whom. The “Tsubaki Spirit” has been adopted as our corporate philosophy, and action guidelines have been formulated that are common to the entire Tsubaki Group. This approach is grounded in the “Tsubaki Group DNA” that we have inherited from our predecessors. It reflects the value that the Tsubaki Group provides to the world, what we should continue to value as our social mission, what we identify as our goals, our code of conduct, and our founding spirit. As a manufacturing enterprise, we are committed to the Japanese manufacturing concept of monozukuri, or manufacturing expertise. We shall continue to provide our customers and society at large with the value they desire by providing solutions that transcend the conventional scope of monozukuri. We aim to remain a company that meets the needs of the community by responding to expectations and providing value that even exceeds those expectations.
Our Group aims to provide a consolidated dividend payout ratio of 30%, which reflects our emphasis on ensuring a return to shareholders. Specifically, for the current fiscal year, we plan to pay a dividend of 23 yen per share (for a consolidated dividend payout ratio of 30.0%).
We look forward to the continued support of our shareholders as we remain dedicated to meeting the challenges of the future.
TSUBAKIMOTO CHAIN CO.
Chairman and CEO
President and COO