Securing Sales and Profits by Expanding the Packaging Machinery Business and Maintaining the Production Machinery Business

「In the packaging machinery business, despite a challenging business environment, including price competition with competitors, the company captured continuing demand for automation, particularly in the confectionery and food industries. Revenue was ¥6,541 million (¥5,785 million in the same period of the previous year, up 13.1%). Segment profit was ¥407 million (¥4 million in the same period of the previous year, up 8,658.8%), reflecting higher revenue and an improved cost ratio from efficiency improvements and cost pass-through. In the production machinery business, demand for large-scale projects for specific overseas customers had subsided from recent levels, and revenue was ¥3,151 million (¥7,105 million in the same period of the previous year, down 55.6%). Segment profit was ¥880 million (¥2,258 million in the same period of the previous year, down 61.0%).」

「In the packaging machinery segment, despite a challenging business environment, including price competition with competitors, the company captured continuing demand for automation, particularly in the confectionery and food industries. Revenue was ¥2,321 million (¥1,553 million in the previous interim accounting period, up 49.4%). Although efficiency improvements and cost pass-through progressed, segment loss was ¥77 million (¥207 million loss in the previous interim accounting period), as selling, general and administrative expenses increased due to active sales activities and development investment, in addition to the impact of persistently high raw-material prices. In the production machinery segment, demand for large-scale projects for specific overseas customers had subsided from recent levels, and some projects were also postponed. Revenue was ¥1,165 million (¥5,061 million in the previous interim accounting period, down 77.0%), and segment profit was ¥281 million (¥1,317 million in the previous interim accounting period, down 78.6%).」

「In the packaging machinery segment, orders, including large-scale projects, remained solid as investment appetite continued in response to demand for automation and labor saving driven by labor shortages, particularly in the confectionery and food industries. Revenue was ¥5,785 million (¥4,821 million in the same period of the previous year, up 20.0%). Despite a challenging business environment, including price competition with competitors, the segment posted profit of ¥4 million, compared with a loss of ¥59 million in the same period of the previous year, due to the effect of higher revenue. In the production machinery segment, demand for large-scale projects for specific overseas customers, which had been concentrated in recent years, subsided, and revenue was ¥7,105 million (¥8,637 million in the same period of the previous year, down 17.7%). Segment profit was ¥2,258 million (¥2,060 million in the same period of the previous year, up 9.6%), as productivity improvement initiatives substantially improved the cost ratio.」

「In the packaging machinery segment, inquiries and orders, including large-scale projects, remained solid as investment appetite continued in response to demand for automation and labor saving, particularly in the confectionery and food industries. However, many projects were scheduled to be recognized as revenue from the second half onward, and revenue was ¥1,553 million (¥1,663 million in the previous interim accounting period, down 6.6%). Although efficiency improvements and efforts to pass on costs improved the cost ratio, segment loss was ¥207 million (¥184 million loss in the previous interim accounting period) due to lower revenue and increased development investment and other expenses. In the production machinery segment, sales of a large-scale project for a specific overseas customer were concentrated in the first half above plan. Revenue was ¥5,061 million (¥4,333 million in the previous interim accounting period, up 16.8%), and segment profit was ¥1,317 million (¥909 million in the previous interim accounting period, up 44.8%).」

「① Increase revenue from the packaging machinery business and raise the overseas sales ratio ② Secure stable volumes and profitability in the production machinery business ③ Practice sustainability management aimed at realizing a sustainable society」

「In the packaging machinery segment, orders exceeded the level in the same period of the previous year as sales activities normalized, but difficulties in procuring parts continued in some areas due to supply chain disruptions. Revenue during the cumulative third-quarter period was ¥2,924 million (¥3,067 million in the same quarter of the previous year, down 4.7%). The segment was unable to absorb profit pressures, including the higher cost ratio caused by persistently high material costs, through efficiency improvements and efforts to pass on costs, resulting in segment loss of ¥174 million (¥157 million in the same quarter of the previous year). In the production machinery segment, performance remained solid, primarily for large-scale projects. Revenue during the cumulative third-quarter period was ¥6,025 million (¥5,141 million in the same quarter of the previous year, up 17.2%), and segment profit was ¥1,250 million (¥942 million in the same quarter of the previous year, up 32.6%).」

「In the packaging machinery segment, the company pursued active sales activities, including sales visits and participation in trade shows, but difficulties in procuring parts also affected performance. Revenue during the cumulative second-quarter period was ¥1,663 million (¥1,780 million in the same quarter of the previous year, down 6.6%). Segment loss was ¥184 million (¥101 million in the same quarter of the previous year), as higher raw-material costs and increased labor costs and sales activity expenses increased the fixed-cost burden. In the production machinery segment, supported by a solid order backlog centered on large-scale projects, revenue was ¥4,333 million (¥2,766 million in the same quarter of the previous year, up 56.7%), and segment profit was ¥909 million (¥508 million in the same quarter of the previous year, up 78.9%).」

「In the packaging machinery segment, the impact of COVID-19 was subsiding, and the company pursued active sales activities, including sales visits and participation in trade shows. However, difficult conditions in procuring parts persisted, and revenue was ¥604 million (¥666 million in the same quarter of the previous year, down 9.4%). Segment loss was ¥153 million (¥110 million in the same quarter of the previous year), as higher fixed-cost burdens from the increased cost ratio, labor costs and sales activity expenses weighed on profit. In the production machinery segment, supported by a solid order backlog centered on large-scale projects, revenue during the cumulative first-quarter period was ¥2,591 million (¥884 million in the same quarter of the previous year, up 192.8%), and segment profit was ¥518 million (¥165 million in the same quarter of the previous year, up 213.8%).」

「In the packaging machinery segment, as the impact of COVID-19 gradually subsided, the company actively pursued sales, but continued difficulties in procuring parts forced it to operate in a challenging business environment. Revenue was ¥5,041 million (¥4,544 million in the same period of the previous year, up 10.9%). Segment loss was ¥46 million, compared with segment profit of ¥20 million in the same period of the previous year, due to a deterioration in the cost ratio caused by higher material prices and increased selling, general and administrative expenses. In the production machinery segment, orders remained firm, primarily for large-scale projects, and revenue was ¥8,265 million (¥4,274 million in the same period of the previous year, up 93.3%). Segment profit was ¥1,653 million (¥917 million in the same period of the previous year, up 80.3%), despite a deterioration in the cost ratio caused by higher parts prices and delivery delays, as the substantial increase in revenue more than offset these factors.」

「In the packaging machinery segment, revenue during the cumulative third-quarter period was ¥3,067 million (¥2,868 million in the same quarter of the previous year, up 6.9%), supported by the normalization of sales activities and the benefits of participating in trade shows, despite some stagnation in orders as the impact of COVID-19 continued. However, profit was pressured by higher material costs, utility expenses and other factors, resulting in segment loss of ¥157 million (¥52 million in the same quarter of the previous year). In the production machinery segment, supported by a substantial order backlog, primarily for large-scale projects, revenue during the cumulative third-quarter period was ¥5,141 million (¥3,087 million in the same quarter of the previous year, up 66.5%), and segment profit was ¥942 million (¥656 million in the same quarter of the previous year, up 43.7%). Although higher prices for imported parts increased costs in some areas, efforts to improve efficiency resulted in higher revenue and profit.」

「In the packaging machinery segment, revenue during the cumulative second-quarter period was ¥1,780 million (¥1,739 million in the same quarter of the previous year, up 2.4%), supported by sales visits and participation in trade shows, despite the continuing impact of COVID-19 and persistent difficulties in procuring parts and other items. Segment loss was ¥101 million (¥107 million in the same quarter of the previous year), partly due to higher labor costs and sales activity expenses. In the production machinery segment, strong orders continued, primarily for large-scale projects. Despite factors putting pressure on profit, including higher prices for imported parts, revenue during the cumulative second-quarter period was ¥2,766 million (¥2,087 million in the same quarter of the previous year, up 32.5%), and segment profit was ¥508 million (¥402 million in the same quarter of the previous year, up 26.2%).」

「In the packaging machinery segment, orders during the cumulative first-quarter period increased by approximately 10% year on year, supported by sales visits and participation in trade shows, despite the continued impact of COVID-19. Revenue was ¥666 million (¥645 million in the same quarter of the previous year, up 3.3%). However, segment loss was ¥110 million (¥83 million in the same quarter of the previous year), as higher fixed-cost burdens from increased labor costs and sales activity expenses, as well as a higher cost ratio, outweighed other factors. In the production machinery segment, strong orders continued, primarily for large-scale projects, but revenue during the cumulative first-quarter period was limited to ¥884 million (¥1,571 million in the same quarter of the previous year, down 43.7%), and segment profit was ¥165 million (¥311 million in the same quarter of the previous year, down 46.9%).」

「In the packaging machinery segment, orders were recovering, but the impact of COVID-19 continued and customers remained cautious about new capital investment. ... Revenue was ¥4,544 million (¥5,001 million in the same period of the previous year, down 9.1%). Segment profit was ¥20 million, compared with a segment loss of ¥15 million in the same period of the previous year, as the impact of cost reductions outweighed higher selling, general and administrative expenses resulting from the recovery in sales activity. In the production machinery segment, the company secured more orders than initially expected, primarily for large-scale projects, but many deliveries were scheduled for the next fiscal year or later. Revenue for the current fiscal year was therefore ¥4,274 million (¥5,706 million in the same period of the previous year, down 25.1%). Segment profit was ¥917 million (¥1,203 million in the same period of the previous year, down 23.8%). Although cost reductions improved the cost ratio, the impact of lower revenue was substantial.」

「In the packaging machinery segment, inquiries increased and orders were recovering, up 60% year on year, as sales activities and trade shows resumed despite the continuing impact of COVID-19. However, sales declined to ¥2,868 million (¥3,860 million in the same quarter of the previous year, down 25.7%). Segment earnings improved from the cumulative second-quarter period because of lower sales and higher sales activity and development costs, but the segment still posted a loss of ¥52 million (segment profit of ¥33 million in the same quarter of the previous year). In the production machinery segment, inquiries for major projects remained solid and orders increased 57% year on year, but sales declined to ¥3,087 million (¥4,156 million in the same quarter of the previous year, down 25.7%) because fewer projects were recognized as sales during the period. Segment profit was ¥656 million (¥914 million in the same quarter of the previous year, down 28.3%).」

「In the packaging machinery segment, although the impact of COVID-19 continued, inquiries and orders were trending upward as sales activities and trade shows resumed. However, sales declined to ¥1,739 million (¥2,104 million in the same quarter of the previous year, down 17.4%) because beginning-of-year carried-forward orders were low. In terms of earnings, in addition to lower sales, increased sales activity and development costs resulted in a segment loss of ¥107 million (segment loss of ¥166 million in the same quarter of the previous year). In the production machinery segment, major projects remained solid but declined from the previous year, resulting in sales of ¥2,087 million (¥2,540 million in the same quarter of the previous year, down 17.8%) and segment profit of ¥402 million (¥543 million in the same quarter of the previous year, down 25.8%).」

「In the packaging machinery segment, although the impact of COVID-19 continued, orders during the cumulative first-quarter period increased year on year as sales visits and some trade shows resumed. However, sales declined to ¥645 million (¥799 million in the same quarter of the previous year, down 19.3%) because opening order backlogs were low. In terms of earnings, in addition to lower sales, higher sales activity costs and other factors resulted in a segment loss of ¥83 million (segment loss of ¥72 million in the same quarter of the previous year). In the production machinery segment, performance remained strong, centered on major projects, resulting in sales of ¥1,571 million (¥1,249 million in the same quarter of the previous year, up 25.8%) and segment profit of ¥311 million (¥301 million in the same quarter of the previous year, up 3.1%).」

「The company has formulated the sixth medium-term management plan commencing in FY2021, and aims to become a “value-creation company” that brings new ideas generated through further deepening of communication to fruition and continues to provide new value to society. The plan sets out the following basic policy. ② Secure sales and earnings through both the packaging machinery and production machinery businesses」

「In the packaging machinery segment, although core packaging machinery remained sluggish because sales activities continued to be constrained by the impact of COVID-19, including the suspension of sales visits and the cancellation or postponement of trade shows and other promotional measures, sales increased to ¥3,860 million (¥3,570 million in the same quarter of the previous year, up 8.1%) because new major projects for specific customers were recognized as sales. In terms of earnings, however, segment profit declined to ¥33 million (¥164 million in the same quarter of the previous year, down 79.7%) mainly because costs for the new major projects increased. In the production machinery segment, performance remained solid, centered on major projects, but sales declined to ¥4,156 million (¥5,377 million in the same quarter of the previous year, down 22.7%), while segment profit increased to ¥914 million (¥842 million in the same quarter of the previous year, up 8.6%).」

「In the packaging machinery segment, sales declined to ¥2,104 million (¥2,194 million in the same quarter of the previous year, down 4.1%) because sales activity remained constrained by the impact of COVID-19, including the poor performance of gift-wrapping packaging machinery for specialty products, the suspension of sales visits and the cancellation of trade shows and other promotional measures. In terms of earnings, in addition to lower sales, primarily higher costs for new major projects resulted in a segment loss of ¥166 million (segment profit of ¥69 million in the same quarter of the previous year). In the production machinery segment, performance remained strong, centered on major projects, resulting in sales of ¥2,540 million (¥3,013 million in the same quarter of the previous year, down 15.7%) and segment profit of ¥543 million (¥393 million in the same quarter of the previous year, up 38.2%).」

「In the packaging machinery segment, sales declined to ¥799 million (¥1,055 million in the same quarter of the previous year, down 24.3%) because gift-wrapping packaging machinery for specialty products performed poorly due to the impact of COVID-19, sales activities were constrained by the suspension of sales visits and the cancellation of trade shows and other promotional measures, and other factors. In terms of earnings, in addition to lower sales, increased costs for newly developed machines and other factors resulted in a segment loss of ¥72 million (segment profit of ¥44 million in the same quarter of the previous year). In the production machinery segment, performance remained strong, centered on major projects, resulting in sales of ¥1,249 million (¥1,216 million in the same quarter of the previous year, up 2.7%) and segment profit of ¥301 million (¥136 million in the same quarter of the previous year, up 120.6%).」

「In the packaging machinery segment, sales increased to ¥5,157 million (¥4,856 million in the previous fiscal year, up 6.2%) as demand for capital investment to address labor shortages remained solid, including demand for top-wrapping machines and bag-making and filling machines for the confectionery and food industries. However, increased development costs and numerous new development projects with low profit margins weighed on earnings for the packaging machinery business as a whole, resulting in a segment loss of ¥47 million (segment profit of ¥236 million in the previous fiscal year). In the production machinery segment, performance remained solid, centered on major projects, resulting in sales of ¥7,180 million (¥6,793 million in the previous fiscal year, up 5.7%) and segment profit of ¥1,413 million (¥931 million in the previous fiscal year, up 51.8%).」

「During the cumulative third-quarter period, both the packaging machinery and production machinery businesses performed well, resulting in sales of ¥8,948 million (¥6,473 million in the same quarter of the previous year, up 38.2%).」

「In the packaging machinery segment, sales of top-wrapping machines and other products for the confectionery and food industries remained solid, resulting in sales of ¥2,194 million (¥1,891 million in the same quarter of the previous year, up 16.0%) and segment profit of ¥69 million (¥90 million in the same quarter of the previous year, down 23.2%). In the production machinery segment, performance remained strong, centered on major projects, resulting in sales of ¥3,013 million (¥1,999 million in the same quarter of the previous year, up 50.7%) and segment profit of ¥393 million (¥212 million in the same quarter of the previous year, up 84.6%).」

「Under these economic conditions, the company worked as a group to secure performance. As a result, during the cumulative first-quarter period, both the packaging machinery and production machinery businesses performed well, and sales were ¥2,272 million (¥1,230 million in the same quarter of the previous year, up 84.7%).」

「There were no material changes to, or newly identified issues among, the business and financial challenges facing the Company during the cumulative first-quarter period.」

「① Expansion of the domestic packaging machinery business In the packaging machinery segment, inquiries for various types of food packaging machinery, bag-making and filling machines, and packaging line systems responding to demand for labor-saving equipment remained solid, and orders exceeded the previous fiscal year. However, sales declined to ¥4,856 million (¥5,419 million in the previous fiscal year, down 10.4%) because of lower sales of tobacco-related machinery and the concentration of orders in the second half and later. In the production machinery segment, orders remained active, and sales rose to ¥6,793 million (¥2,181 million in the previous fiscal year, up 211.4%) because profitability on existing orders improved and some sales originally expected in the following fiscal year were brought forward into the current fiscal year.」

「In the packaging machinery segment, the company conducted active sales activities to capture capital investment demand associated with labor shortages, but due in part to weak sales related to line systems, sales were ¥3,051 million (¥3,868 million in the same quarter of the previous year, down 21.1%) and segment profit was ¥157 million (¥262 million in the same quarter of the previous year, down 40.0%). In the production machinery segment, favorable conditions continued, including the receipt of multiple new major project orders. Against this backdrop, major projects ordered in the previous fiscal year were recognized as sales in succession, resulting in a substantial increase in sales to ¥3,422 million (¥1,117 million in the same quarter of the previous year, up 206.3%). Segment profit, however, was limited to ¥235 million (¥263 million in the same quarter of the previous year, down 10.8%) because costs were higher than initially expected and provisions were recorded for projects expected to become loss-making.」

「In the packaging machinery segment, the company conducted active sales activities to expand its business domain, worked to acquire new customers and actively developed new products. As a result, orders exceeded the previous year, but because many sales were scheduled for the second half or later and sales of some packaging machines fell below expectations, sales were ¥1,891 million (¥2,237 million in the same quarter of the previous year, down 15.4%), and segment profit was ¥90 million (¥132 million in the same quarter of the previous year, down 31.8%). In the production machinery segment, some of the major projects ordered in the previous fiscal year were recognized as sales, resulting in sales of ¥1,999 million (¥695 million in the same quarter of the previous year, up 187.6%) and segment profit of ¥212 million (¥164 million in the same quarter of the previous year, up 29.1%).」

「In the packaging machinery segment, sales of bag-making and filling machines and line-system equipment for the confectionery and food industries remained solid, but overall sales were ¥853 million (¥902 million in the same quarter of the previous year, down 5.4%), resulting in a segment loss of ¥1 million (segment profit of ¥16 million in the same quarter of the previous year). In the production machinery segment, sales centered on major projects rose to ¥376 million (¥199 million in the same quarter of the previous year, up 88.6%), but segment profit fell to ¥8 million (¥33 million in the same quarter of the previous year, down 75.5%) because many projects had tight profit margins.」

「During this medium-term plan, we have established the following basic policy, focusing on expanding business volume and securing stable earnings. ① Expansion of the domestic packaging machinery business」

「In the packaging machinery segment, centered on gift-wrapping packaging machinery for the confectionery and food industries, bag-making and filling machines, and line-system equipment, sales were ¥3,868 million (¥3,211 million in the same quarter of the previous year, up 20.5%). Segment profit was ¥262 million (¥183 million in the same quarter of the previous year, up 43.1%). In the production machinery segment, orders remained strong, and sales were ¥1,117 million (¥1,154 million in the same quarter of the previous year, down 3.3%), while segment profit was ¥263 million (¥229 million in the same quarter of the previous year, up 14.9%).」

「In the packaging machinery segment, centered on gift-wrapping packaging machinery for the confectionery and food industries, bag-making and filling machines, and line-system equipment, sales were ¥2,237 million (¥1,942 million in the same quarter of the previous year, up 15.2%). Segment profit was ¥132 million (¥79 million in the same quarter of the previous year, up 67.1%). In the production machinery segment, orders remained strong amid a variety of inquiries, but as a major project had reached completion, sales were ¥695 million (¥1,021 million in the same quarter of the previous year, down 31.9%), and segment profit was ¥164 million (¥199 million in the same quarter of the previous year, down 17.5%).」

「In the packaging machinery segment, sales of gift-wrapping packaging machinery for the confectionery and food industries, bag-making and filling machines, and line-system equipment remained strong, resulting in sales of ¥902 million (¥598 million in the same quarter of the previous year, up 50.6%). Segment profit was ¥16 million, compared with a segment loss of ¥39 million in the same quarter of the previous year. In the production machinery segment, the company continued to receive a variety of inquiries, but as a major project had reached completion, sales were ¥199 million (¥559 million in the same quarter of the previous year, down 64.3%), and segment profit was ¥33 million (¥98 million in the same quarter of the previous year, down 65.7%).」

「The company aims to secure target sales and stable earnings and strengthen its financial position by expanding the packaging machinery business and continuing to maintain the production machinery business.」

「There were no material changes to, or newly identified issues among, the business and financial challenges facing the Company during the cumulative nine-month period.」

「During the six-month period ended 30 September, there were no material changes to, or newly arising issues among, the business and financial issues that the Company must address.」

「There were no material changes to, or newly identified issues among, the business and financial challenges facing the Company during the cumulative first-quarter period.」

「The company aims to secure target sales and stable earnings and strengthen its financial position by expanding the packaging machinery business and continuing to maintain the production machinery business.」