Risks from Intensifying Competition and Changes in the Market Environment

「By overseas region, sales of mid- and high-end models remained firm in North America, while a reactionary decline following the strong performance in the previous fiscal year was seen in the Asian market. In addition, unit sales struggled to grow due to intensifying competition in emerging markets, weaker consumer spending in Europe, and the challenging competitive environment, among other factors.」

「However, sales struggled due to a reactionary decline following the strong performance in the previous fiscal year in Asian markets and the challenging competitive environment in the European market, among other factors.」

「However, the business environment remains challenging due to delays in global capital investment plans and lower demand for die-cast products from industrial robot manufacturers. As a result, total sales in the industrial equipment business were ¥2,398 million, down ¥530 million year on year, while the operating loss was ¥271 million, compared with operating profit of ¥5 million in the same period of the previous year.」

「However, the sewing machine market remains challenging due to the impact of US monetary tightening, the prolonged Russia-Ukraine situation, and heightened geopolitical risks arising from the increasingly tense situation in the Middle East.」

「In developed markets such as North America and Europe, we began introducing and selling new products and focused sales efforts primarily on high-value-added products. However, sales of mainstream low- and mid-priced products fell short of expectations.」

「In the Household Equipment Business, the company focused on sales centered on high-value-added products. However, sales of household sewing machines did not expand in North America, and the company failed to achieve the expected results in markets including Europe and Australia.」

「As a result, overseas and domestic sewing machine sales totaled 930,000 units, down 670,000 from the previous fiscal year. Revenue for the Home Equipment Business totaled ¥29,765 million, down ¥4,918 million, and operating profit was ¥1,895 million, down ¥1,539 million.」

「However, the impact of the situation surrounding Russia and Ukraine was substantial, and sales continued to struggle overall in Europe, Japan, and other regions due to weak personal consumption and the fading of stay-at-home demand. As a result, combined overseas and domestic sewing-machine sales totaled 670,000 units, down 560,000 units year on year. Total revenue in the Household Equipment Business was ¥22,225 million, down ¥4,212 million year on year, while operating profit was ¥953 million, down ¥1,701 million.」

「However, the economic impact of the situation surrounding Russia and Ukraine, combined with the post-pandemic decline in stay-at-home demand in Japan and overseas, caused sales of low- and mid-priced models to stagnate across a wide range of regions.」

「In the domestic market, the company worked actively to stimulate demand through exhibitions and workshops, but demand remained sluggish due to a decline following the surge in sewing-machine demand during the COVID-19 pandemic.」

「However, if low-priced sewing machines become more widespread in the market than expected, the planned strategy may not progress as intended and sales could diverge significantly from the sales plan.」

「As economic activity resumed, the capital investment environment also improved. Inquiries for both tabletop robots and servo presses increased, and the businesses shifted to a recovery trend.」

「In the Industrial Equipment Business, companies' tendency to restrain capital investment during the COVID-19 pandemic has been gradually easing, and recent signs suggest that sales of tabletop robots and servo presses have bottomed out.」

「However, although some signs of improvement were seen, particularly in the automotive sector, companies continued to exercise restraint over new capital investment. Sales of tabletop robots and servo presses, as well as the die-casting business, continued to struggle. As a result, total revenue in the Industrial Equipment Business was ¥3,363 million, down ¥1,008 million year on year, while the operating loss was ¥292 million, compared with an operating loss of ¥247 million in the previous year.」

「However, Japan, Europe, and North America continued to restrain capital investment. Although signs of recovery were seen in China, the market as a whole remained sluggish, and sales of tabletop robots and servo presses, as well as the die-casting business, continued to struggle. As a result, total revenue in the Industrial Equipment Business was ¥2,230 million, down ¥695 million year on year, while the operating loss was ¥213 million, compared with an operating loss of ¥209 million in the previous year.」

「In the Industrial Equipment Business, the deterioration in market conditions caused by US-China trade friction was further exacerbated by the spread of COVID-19. Capital investment failed to recover in the precision equipment and automotive sectors, the main markets, and sales of tabletop robots and servo presses continued to struggle.」

「The company recognizes that market conditions in Japan and overseas remain extremely challenging.」

「However, the business environment surrounding the Group remained challenging. In the third quarter of the current fiscal year, revenue totaled ¥26,362 million, down ¥2,969 million year on year, operating profit totaled ¥562 million, down ¥417 million, ordinary profit totaled ¥464 million, down ¥675 million, and net income attributable to owners of the parent totaled ¥150 million, down ¥531 million.」

「Meanwhile, markets in Europe, where uncertainty over the economic outlook remained, and emerging markets affected indirectly by US economic sanctions continued to struggle. As a result, combined overseas and domestic sewing-machine sales totaled 640,000 units, down 100,000 units year on year. Revenue in the Household Equipment Business totaled ¥13,029 million, down ¥1,034 million year on year, while operating profit totaled ¥421 million, up ¥159 million year on year.」

「In the Household Equipment Business, sales volumes in North America were recovering against a backdrop of firm personal consumption. However, markets in Europe, where the economic recovery lacked momentum, and emerging markets affected by US economic sanctions remained sluggish. The domestic market also continued to struggle. As a result, combined overseas and domestic sewing-machine sales totaled 300,000 units, down 70,000 units year on year, while total revenue in the Household Equipment Business was ¥6,023 million, down ¥949 million year on year.」

「As a result, although sales in Russia and North America increased, led by low- and mid-priced products, stagnation in Europe, which the company regards as one of its key markets, and in emerging markets such as the Middle East and Latin America remained unresolved. The domestic sewing-machine market also continued to struggle. Consequently, combined overseas and domestic sewing-machine sales totaled 1.13 million units, down 60,000 units year on year, while revenue in the Household Equipment Business totaled ¥21,612 million, down ¥1,498 million, and operating profit totaled ¥646 million, down ¥513 million.」

「However, the sewing-machine market remained stagnant, and recovery in the key markets of Europe and North America was weaker than expected. Sales to emerging markets, except for a recovery in Russia, also remained sluggish, resulting in continued difficulties, including a shortfall against the initial sales plan.」

「Meanwhile, the recovery in North America, which the company regards as a key market, lacked momentum, while the European market continued to struggle, leaving conditions difficult overall.」

「However, the business environment surrounding the Group, particularly market conditions in the Household Equipment Business, remained severe. Total revenue for the fiscal year was ¥40,778 million, up ¥1,923 million from the previous fiscal year, while operating profit was ¥2,075 million, down ¥401 million, and ordinary profit was ¥2,110 million, down ¥26 million.」

「However, as Christmas sales in North America and Europe failed to grow as much as expected, combined overseas and domestic sewing-machine sales totaled 1.19 million units, down 40,000 units year on year. Revenue in the Household Equipment Business totaled ¥23,111 million, up ¥587 million year on year, while operating profit totaled ¥911 million, down ¥481 million year on year.」

「As a result, combined overseas and domestic sewing-machine sales totaled 790,000 units, down 10,000 units year on year. Revenue in the Household Equipment Business totaled ¥15,117 million, up ¥269 million year on year, while operating profit totaled ¥509 million, down ¥311 million year on year.」

「However, as the sales share of low-priced models increased, revenue totaled ¥6,959 million, down ¥340 million year on year, while operating profit totaled ¥164 million, down ¥227 million year on year.」

「However, due to intensifying price competition and sluggish performance in the die-casting business, revenue in the Industrial Equipment Business was limited to ¥5,919 million, up ¥91 million from the previous fiscal year, while operating profit totaled ¥394 million, down ¥66 million.」

「However, sales of high-end models in North America and Europe were sluggish. As a result, combined overseas and domestic sewing-machine sales totaled 1.23 million units, down 70,000 units year on year, while revenue in the Household Equipment Business totaled ¥22,523 million, down ¥3,878 million year on year.」

「However, as a result of sluggish performance in the die-casting business, revenue in the Industrial Equipment Business totaled ¥2,903 million, down ¥19 million year on year, while operating profit totaled ¥215 million, down ¥11 million year on year.」

「Although sewing-machine sales in Europe were sluggish due to slowing personal consumption,」

「If market conditions change significantly, including through intensifying competition, the change could affect the performance of the Group.」