Sluggish Demand in China and Resource-Producing Country Markets and Geopolitical Risks

「During the fiscal year under review, the Group operated amid increasingly uncertain global conditions, as the global order underwent a process of dismantling and rebuilding driven by power struggles among superpowers, while the United States pursued high-tariff policies and the risk of stagflation increased as conditions in the Middle East became more tense.」

「The business environment surrounding our Group evolved amid growing global uncertainty, including the forced implementation of high U.S. tariffs and rising stagflation risks resulting from heightened tensions in the Middle East, as the scrap-and-build of the global order progressed through power games among superpowers.」

「During the interim consolidated accounting period, the global construction-equipment market remained in an adjustment phase amid economic conditions of increasing uncertainty. Prices remained high and interest rates stayed elevated, global geopolitical conditions remained confused, and Japan's domestic political situation remained fluid. The existing global order, political, economic and security systems entered a fundamental transition phase, including disruption to global trade resulting from the United States' high-tariff policies and intensifying U.S.-China trade friction.」

「During the interim consolidated accounting period, the global construction-equipment market remained on a slowing trend. The post-COVID economic expansion passed its peak and entered an adjustment phase, and although the end of surging prices and a shift in monetary-tightening policies began, policy paralysis during a global election year and geopolitical issues associated with Ukraine, the Middle East and U.S.-China tensions became increasingly acute.」

「During the fiscal year under review, global social and economic conditions entered a new phase of change as globally rising inflation and monetary tightening continued, the economy entered an adjustment period following the rapid post-COVID recovery, security conditions became more tense as the conflict in the Middle East expanded, and social structures changed with the spread of generative AI technology.」

「During the first nine months of the fiscal year under review (1 April 2023 to 31 December 2023), the Group entered an adjustment phase amid turbulent global conditions, as globally rising inflation and monetary tightening policies and the previously strong global economy reached a turning point. The international security environment became more acute following the outbreak of the Israel-Hamas conflict, while society underwent structural changes accompanying the rapid spread of generative AI technology.」

「Global demand for rollers last year fell 10.6% from 54,770 units the previous year to 48,950 units. The main factor was a 38% decline in Chinese demand, from 14,140 units to 8,710 units, which accounted for 93% of the total unit decline.」

「During the first six months of the fiscal year under review (1 April 2022 to 30 September 2022), the Group maintained a solid recovery trend despite turbulent global conditions. Tensions in the international security environment continued as U.S.-China tensions intensified and Russia invaded Ukraine, while global inflation, including energy and component prices, expanded, global supply capacity declined because of disruptions to global supply chains, international capital markets shifted with the interest-rate policies of central banks in Europe and the United States, and the yen depreciated sharply.」

「During the first quarter of the fiscal year under review (1 April 2022 to 30 June 2022), the Group maintained a solid recovery trend amid turbulent global conditions. International security risks increased as U.S.-China tensions intensified and Russia invaded Ukraine, while structural increases in energy and component prices and supply-chain disruptions continued. The international financial markets also shifted with the interest-rate policies of central banks in Europe and the United States, and major Chinese cities underwent lockdowns under China's zero-COVID policy.」

「During the fiscal year under review, economic recovery in the post-COVID era progressed amid turbulent global conditions, as measures to address global warming became fully established, the U.S.-China Cold War structure intensified, and the international security environment became more fluid following the outbreak of the Ukraine crisis. Side effects included structurally higher energy and component prices, supply-chain disruptions, and continued soaring container freight rates.」

「During the first nine months of the fiscal year under review (1 April 2021 to 31 December 2021), economic recovery in the With-COVID era progressed amid continued upheaval in social and economic conditions caused by the full-scale implementation of measures to address global warming and the sharpening of the U.S.-China Cold War structure, accompanied by side effects including structurally higher prices for energy and steel and other materials, soaring container shipping costs, and supply-chain disruptions.」

「During the first six months of the fiscal year under review (1 April 2021 to 30 September 2021), economic recovery in the With-COVID era advanced rapidly amid turbulent global conditions, as society underwent major changes triggered by COVID-19 and global warming. Digital transformation (DX) became fully established, global decarbonization policies (CN) accelerated along with energy and material price increases, supply chains were disrupted as economic activity resumed, and geopolitical tensions centered on the U.S.-China Cold War structure intensified further.」

「Amid rapidly changing global conditions, economic recovery in the with-COVID era began, while geopolitical tensions centered on the U.S.-China Cold War structure intensified further, supply chains were disrupted, and component prices surged.」

「Sales to the Middle East and Russia-CIS were ¥32.531 million, down 94.5% from the previous consolidated fiscal year, as sales activities stagnated.」

「Sales to the Middle East and Russia-CIS were ¥3.840 million, down 91.2% year on year, as sales activities did not progress amid stagnant demand. Sales to other markets were ¥219.654 million, down 15.7%, as sales to Oceania and Africa remained weak despite signs of recovering demand in parts of Latin America.」

「Beginning with the outbreak of the COVID-19 issue, geopolitical tensions centered on the U.S.-China Cold War structure intensified further, while the pace of industrial-structure changes driven by the technology revolution accelerated sharply.」

「Overseas sales were ¥7,102.610 million, down 32.7% year on year, with the Asian market, where sales had been halved, finally showing signs of bottoming out. Sales to North America were ¥2,612.771 million, down 14.3%, remaining at a high level even as demand passed its peak. Sales to the Middle East and Russia-CIS were ¥522.061 million, up 4.4 times year on year. Although the Middle East and Russia remained sluggish amid continued regional instability, projects in the CIS drove the increase. Sales to other markets were ¥345.850 million, down 57.9%, as sales in Latin America, Africa and Oceania all remained sluggish.」

「During the first six months of the fiscal year under review (1 April 2019 to 30 September 2019), the business environment surrounding the Group evolved amid major changes in global political, economic and technological conditions. The domestic economy remained solid, but the global economy slowed as the U.S.-China trade friction continued, geopolitical tensions centered on the U.S.-China Cold War structure intensified, and industrial structures changed rapidly as a result of the technology revolution.」

「During the first quarter of the fiscal year under review, the business environment surrounding the Group evolved amid major changes in global political, economic and technological conditions. The economies of Japan and the United States and other developed countries remained solid, while a slowdown in Asian and emerging-market economies became increasingly evident, geopolitical tensions centered on the U.S.-China Cold War structure intensified, and industrial structures changed rapidly as a result of the technology revolution.」

「During the fiscal year under review, the business environment surrounding the Group evolved amid major upheaval involving structural adjustments in global political, economic and technological conditions, as the global economy, which had previously been expanding, reached a peak, geopolitical tensions centered on the U.S.-China new Cold War structure intensified, and industrial structures underwent major changes accompanying the technology revolution.」

「During the first nine months of the fiscal year under review (1 April 2018 to 31 December 2018), the global economy, which had been expanding since the Lehman shock, reached a peak, while the Group continued to operate in a rapidly changing environment amid structural shifts in the global economy, politics and technology, including heightened geopolitical tensions centered on the U.S.-China new Cold War structure and changes in industrial structures accompanying the technology revolution.」

「During the first six months of the fiscal year under review (1 April 2018 to 30 September 2018), the business environment surrounding the Group showed signs of change and adjustment in the global economy, which had previously been performing well. The North American market remained solid, but in Japan there was a反動減 following special demand related to exhaust-emissions regulations, while overseas emerging-market economies were affected by faster interest-rate hikes by the FRB and intensifying U.S.-China tensions over global dominance.」

「During the first quarter of the fiscal year under review (1 April 2018 to 30 June 2018), the business environment surrounding the Group generally remained favorable, with the economies of Japan and the United States, as well as other developed economies, performing well, domestic demand in Asian countries continuing to expand, and emerging-market economies showing signs of recovery.」

「Recognition, analysis and consideration of the group's operating results and other conditions for the fiscal year」

「During the third quarter of the fiscal year ended March 2018 (1 April 2017 to 31 December 2017), global economic conditions generally followed a recovery trend. Global social and political conditions remained unstable, but the Japanese and US developed economies remained firm, Southeast Asian countries intensified policies to expand domestic demand, and emerging-market economies entered a recovery trend as resource prices recovered.」

「During the second quarter of the fiscal year ended March 2018 (1 April 2017 to 30 September 2017), global social and political conditions remained unstable. Economically, however, the business environment generally followed a gradual recovery trend, supported by steady Japanese and US developed economies, continued policies to expand domestic demand in Southeast Asian countries, a recovery in the Chinese economy and the associated bottoming-out of emerging-market economies.」

「During the first quarter of the fiscal year ended March 2018 (1 April 2017 to 30 June 2017), the business environment surrounding the group remained marked by global social and political instability, but generally followed a gradual recovery trend, supported by steady Japanese and US developed economies, continued policies to expand domestic demand in Southeast Asian countries, signs of a recovery in the Chinese economy and signs that emerging-market economies were bottoming out as resource prices stabilized.」

「Overseas sales increased by ¥231,613 thousand, or 1.9%, year on year to ¥12,440,326 thousand, driven by expanded sales in Asian markets amid sluggish emerging-market conditions and a pause in the North American market. Sales to the Middle East and Russia/CIS remained affected by weak crude oil prices, declining by ¥116,131 thousand, or 43.5%, year on year to ¥150,846 thousand.」

「Sales to the Middle East and Russia/CIS remained affected by weak crude oil prices, declining 44.7% year on year to ¥122,171 thousand. Sales to other markets recovered to ¥396,369 thousand, down 40.8% year on year, as sales to Oceania bottomed out while sales to Africa and Latin America remained stagnant.」

「Sales to the Middle East and Russia/CIS declined 56.5% year on year to ¥86,088 thousand due to economic stagnation associated with falling crude oil prices. Sales to other markets declined 64.2% year on year to ¥166,599 thousand, as sales in Africa, Oceania and Latin America all remained sluggish due to economic stagnation associated with falling resource prices.」

「The business environment surrounding the group evolved in a low-growth and irregular manner amid the UK's decision to leave the EU, increasingly serious terrorism and geopolitical issues, and global economic and political conditions, while the Japanese and US developed economies reached a pause and resource-producing economies remained sluggish.」

「Sales to the Middle East and Russia/CIS declined by ¥465,708 thousand, or 63.6%, year on year to ¥266,977 thousand, affected by deteriorating government finances in oil-producing countries and geopolitical issues.」