Impact of COVID-19 on Customer Capital Investment, Sales Activities and Overseas Business

「During the cumulative third quarter period, Japan's economy saw some stagnation following the reclassification of COVID-19 as a Class 5 disease, but economic activity recovered moderately and signs of a recovery in personal consumption and other areas were observed.」

「During the cumulative second quarter period, Japan's economy showed signs of a gradual recovery toward normalisation as COVID-19 was reclassified as a Class 5 disease.」

「In the packaging machinery segment, the impact of COVID-19 has been subsiding, and the Company pursued active sales activities, including sales visits and exhibiting at trade shows, but」

「In the packaging machinery segment, the impact of COVID-19 has gradually subsided, and as the Company has been pursuing active sales activities,」

「In the packaging machinery segment, although orders received were sluggish in some areas as the impact of COVID-19 continued, revenue in the cumulative third-quarter period was ¥3.067 billion (¥2.868 billion in the same quarter of the previous year, up 6.9%), owing to the normalization of sales activities and the effects of exhibiting at trade shows. However, segment loss was ¥157 million (segment loss of ¥52 million in the same quarter of the previous year), as higher component costs, utility expenses and other price increases exerted significant pressure on profit.」

「In the Packaging Machinery segment, the effects of sales visits and exhibiting at trade shows were emerging, but sales for the cumulative second quarter period were ¥1,780 million (¥1,739 million in the same period of the previous year, up 2.4%) because the impact of COVID-19 continued and parts and other items remained difficult to procure. In terms of earnings, the segment posted a loss of ¥101 million (a loss of ¥107 million in the same quarter of the previous year), partly due to higher personnel and sales activity costs.」

「In the packaging machinery segment, although the impact of COVID-19 continued, orders received in the cumulative first-quarter period increased by approximately 10% year on year, owing in part to the effects of sales visits and exhibiting at trade shows. Revenue was ¥666 million (¥645 million in the same quarter of the previous year, up 3.3%). However, segment loss was ¥110 million (segment loss of ¥83 million in the same quarter of the previous year), as the higher cost ratio and increases in personnel expenses, sales activity expenses and other costs increased the fixed-cost burden.」

「In the Packaging Machinery segment, orders were showing signs of recovery, but the impact of COVID-19 continued and customers remained cautious about new capital investments. ... In terms of earnings, segment profit was ¥20 million (a loss of ¥15 million in the previous year), as the benefits of cost reductions outweighed the increase in selling, general and administrative expenses accompanying the recovery in sales activities.」

「In the packaging machinery segment, although the impact of COVID-19 continued, inquiries increased and orders received recovered, rising 60% year on year, following the resumption of sales activities and trade shows. However, revenue was ¥2.868 billion (¥3.860 billion in the same quarter of the previous year, down 25.7%). Segment loss was ¥52 million (segment profit of ¥33 million in the same quarter of the previous year), although performance improved from the cumulative second-quarter period, as the decline in revenue was compounded by higher sales activity expenses, development costs and other expenses.」

「In the packaging machinery segment, although the impact of COVID-19 continued, inquiries and orders received were trending upward as sales activities and trade shows resumed. However, owing in part to the low carried-forward order backlog at the beginning of the year, revenue was ¥1.739 billion (¥2.104 billion in the same quarter of the previous year, down 17.4%). Segment loss was ¥107 million (segment loss of ¥166 million in the same quarter of the previous year), as the decline in revenue was compounded by higher sales activity expenses, development costs and other expenses.」

「In the packaging machinery segment, although the impact of COVID-19 continued, orders received in the cumulative first-quarter period increased year on year as sales visits and some trade shows resumed. However, owing to the low order backlog at the beginning of the period, revenue was ¥645 million (¥799 million in the same quarter of the previous year, down 19.3%). Segment loss was ¥83 million (segment loss of ¥72 million in the same quarter of the previous year), as the decline in revenue was compounded by higher sales activity expenses and other factors.」

「In the Packaging Machinery segment, orders declined due to the impact of COVID-19, and business conditions remained challenging. However, sales were ¥5,001 million (¥5,157 million in the previous year, down 3.0%) as sales from new large-scale projects and environmental recycling equipment contributed to revenue.」

「In the Packaging Machinery segment, the core packaging machinery business remained sluggish due to continued constraints on sales activities, including the suspension of sales visits and the cancellation or postponement of promotional activities such as trade shows, amid the impact of COVID-19. However, sales from new large-scale projects for specific customers contributed to revenue, bringing sales to ¥3,860 million (¥3,570 million in the same quarter of the previous year, up 8.1%). In terms of earnings, the segment posted profit of ¥33 million (¥164 million in the same quarter of the previous year, down 79.7%), mainly because costs for new large-scale projects increased.」

「In the Packaging Machinery segment, sales of packaging machines for gift-wrapped specialty products remained sluggish due to the impact of COVID-19, while constraints on sales activities continued, including the suspension of sales visits and the cancellation of promotional activities such as trade shows. As a result, sales were ¥2,104 million (¥2,194 million in the same quarter of the previous year, down 4.1%). In terms of earnings, the segment posted a loss of ¥166 million (segment profit of ¥69 million in the same quarter of the previous year), reflecting the decline in sales as well as higher costs, mainly for new large-scale projects.」

「In the Packaging Machinery segment, sales of packaging machines for gift-wrapped specialty products remained sluggish due to the impact of COVID-19. Sales activities were also constrained by the suspension of sales visits and the widespread cancellation of promotional activities such as trade shows. As a result, sales were ¥799 million (¥1,055 million in the same quarter of the previous year, down 24.3%). In terms of earnings, the segment posted a loss of ¥72 million (segment profit of ¥44 million in the same quarter of the previous year), reflecting the decline in sales as well as higher costs for newly developed machines.」

「A sharp reduction in production has been forced by sluggish sales resulting from the impact of COVID-19, which may affect customers' willingness to make capital investments in the future. Exports are also primarily directed to Asian markets, where activity has effectively remained suspended in countries across the region, and the outlook remains uncertain, including because of travel bans. In addition, all domestic and overseas trade shows essential to sales activities have been cancelled or postponed, creating a significant impediment to sales activities.」