Concentration of Sales in the Transportation and Industrial Businesses and Economic Fluctuations

「The outlook remains uncertain due to heightened tensions in the Middle East, continued tensions in Japan–China relations, developments in U.S. trade policy, rising interest rates and prices, and foreign-exchange fluctuations.」

「Under the Medium-Term Management Plan 2026, which covers the fiscal year ending May 2026, the Group is working to achieve ROE of 8% by expanding new businesses and products, thoroughly improving the profitability of existing businesses, and improving asset efficiency with an awareness of the cost of capital. The results for the six-month consolidated accounting period were as follows.」

「Capital investment remained firm against the backdrop of improved corporate earnings and other factors, but uncertainty about the outlook continued due to U.S. tariff measures and the resulting prolonged trade friction between the United States and China, heightened geopolitical risks, the impact of high prices, and fluctuations in interest rates and foreign exchange rates.」

「The economy remained on a gradual recovery trend as employment and income conditions improved. Capital investment showed signs of recovery as corporate earnings improved, but uncertainty about the outlook continued due to increased uncertainty in overseas economies, sustained inflation, surging resource and raw material prices, and fluctuations in interest rates and foreign exchange rates.」

「Personal consumption and capital investment recovered, and corporate earnings improved, so the economy remained on a gradual recovery trend. However, uncertainty about the outlook continued due to the impact of a downturn in overseas economies and sustained inflation, as well as surging resource and raw material prices.」

「Personal consumption and capital investment recovered, and corporate earnings improved, so the economy remained on a gradual recovery trend. However, uncertainty about the outlook continued due to the impact of a downturn in overseas economies and sustained inflation, as well as surging resource and raw material prices.」

「During the consolidated fiscal year, social and economic activity in Japan was gradually normalising as restrictions on activity associated with COVID-19 were eased and corporate capital investment recovered. Overseas, economies in many countries were recovering gradually, while China was on a recovery trend following the lifting of its zero-COVID policy. Meanwhile, uncertainty about the outlook continued due to heightened geopolitical risks, rising raw material and energy prices, prolonged shortages of parts, and financial and foreign exchange market conditions.」

「During the nine-month period ended 28 February 2023 (1 June 2022 to 28 February 2023), restrictions on activity associated with COVID-19 were eased and social and economic activity was gradually normalising in Japan. Overseas, economies in many countries were recovering gradually, while China’s economy was also moving toward recovery following the lifting of its zero-COVID policy. Meanwhile, uncertainty about the outlook continued due to geopolitical risks, rising raw material prices, prolonged shortages of parts and foreign exchange movements.」

「During the six-month period ended 30 November 2022 (1 June 2022 to 30 November 2022), the Japanese economy remained affected by COVID-19, although social and economic activity showed signs of normalisation following the easing of restrictions on activity. Meanwhile, uncertainty about the outlook continued due to geopolitical risks, including the situation in Ukraine, rising raw material prices, shortages of parts, and the depreciation of the yen.」

「Railway passenger numbers are gradually recovering to approximately 70% of pre-pandemic levels, but there is no clear prospect of a return to those levels, partly because the number of regular passengers remains depressed due to teleworking.」

「Railway passenger numbers are gradually recovering but have still not returned to pre-pandemic levels. Manufacturing capital investment was generally on a recovery trend following improved corporate earnings, but uncertainty about the outlook continued due to rising resource prices, constraints on parts supplies and the depreciation of the yen.」

「Railway passenger numbers are gradually recovering, but have not returned to pre-pandemic levels because of repeated restrictions on activity due to the spread of new variants and changes in people’s behaviour and values in a society living with COVID-19. In manufacturing, capital investment varied by industry, and although there were moves to resume investment that had been postponed, uncertainty about the outlook persisted due to the impact of the spread of new variants in Japan, rising resource prices, constraints on parts supplies and the depreciation of the yen.」

「Against this backdrop, the Group continued to be affected by COVID-19 in terms of orders and revenue. However, signs of recovery have begun to emerge as postponed capital investment plans are being reconsidered and sales activities involving direct visits, which had previously been restricted, resume.」

「Against this backdrop, some railway operators have continued to review or postpone plans to build or replace rolling stock, while manufacturers have continued to review or postpone equipment renewal plans.」

「The Group was affected in orders and revenue as some railway operators reviewed or postponed plans to build or replace rolling stock, and manufacturers reviewed or postponed plans to renew equipment.」

「During the nine-month period ended 31 December, the Japanese economy remained in a difficult situation due mainly to the spread of COVID-19 and the effects of two declarations of a state of emergency. However, signs of recovery began to emerge in capital investment by manufacturers.」

「The business environment surrounding the Group has become challenging amid the downturn in economic activity. Some customers, including railway operators and manufacturers, have reviewed or postponed plans to build or replace rolling stock and to renew equipment, respectively.」

「In the Industrial Business, we have seen an impact on orders because some customers in industries where the business environment has deteriorated due to weakening demand have become cautious about capital investment. In addition, face-to-face negotiations have become more difficult, causing some disruption to sales activities such as overseas orders and technical proposals. On the revenue side, delays in acceptance and delivery, including delays in on-site commissioning and adjustments, have begun to affect mainly overseas projects.」

「More recently, downside risks to the global economy attributable to these factors have increased, the trend toward restrained capital investment has strengthened, and companies have successively decided not to implement base-pay increases for the first time in 7 years. Economic activity by companies and personal consumption are expected to remain sluggish for some time.」

「Although the prolonged US-China trade dispute, the situation in the Middle East, and Japan-South Korea relations resulted in increased uncertainty and caution in manufacturing capital investment, corporate earnings remained at a high level and personal consumption remained firm, with base-pay increases implemented for the sixth consecutive year. The business environment surrounding the Company has generally remained within the range anticipated at the beginning of the fiscal year.」

「During the three months ended 31 August 2019, from 1 June 2019 to 31 August 2019, uncertainty increased due to the prolonged US-China trade dispute, the situation in the Middle East, and Japan-South Korea relations, leading to caution in manufacturing capital investment. However, corporate earnings remained at a high level, and personal consumption remained firm, with base-pay increases implemented for the sixth consecutive year.」

「During the consolidated fiscal year, concerns remained about the impact of developments in US-China trade issues on the global economy and uncertainty about the outlook. However, corporate earnings remained at a high level, capital investment remained firm, and personal consumption also remained firm, with base-pay increases implemented for the sixth consecutive year, supporting a gradual recovery trend.」

「During the nine months ended 28 February 2019, from 1 June 2018 to 28 February 2019, concerns remained about the impact of developments in US-China trade issues on the global economy and uncertainty about the outlook. However, capital investment remained firm as corporate earnings stayed at a high level, and personal consumption also remained firm, with base-pay increases implemented for the sixth consecutive year, supporting a gradual recovery trend.」

「During the six months ended 30 November 2018, from 1 June 2018 to 30 November 2018, Japan's economy continued on a gradual recovery trend. Concerns stemming from US-China trade friction and higher US interest rates were growing, but consumption remained firm due to inbound tourism and wage increases, the dollar/yen exchange rate remained stable, corporate earnings expanded, and capital investment increased.」

「Under these circumstances, based on the medium-term management plan “Re-Vitalize 2020 (Revitalize2020),” launched in July 2018, the Group is working as one to strengthen its organizational capabilities and establish a “muscular” business operating structure capable of generating stable profits by delivering high-quality products to customers quickly.」

「The Group depends on the transportation and industrial business segments for the majority of its sales. The Group's customers operate businesses in Japan and overseas. Accordingly, economic conditions in each country, including economic trends and personal consumption, may affect the Group's business performance.」

「The business environment surrounding the Group during the nine months ended 28 February 2018 remained firm in the global economy, including the United States and Europe, although some concerns about geopolitical risks remained. Japan was also on a gradual recovery trend, including an improving trend in capital investment. Railway infrastructure investment in China, ASEAN, and Japan remained firm.」

「The business environment surrounding the Group during the six months ended 30 November 2017, from 1 June 2017 to 30 November 2017, remained firm in the global economy, including the United States and Europe, although some concerns about geopolitical risks remained. Japan was also on a gradual recovery trend, including an improving trend in capital investment. Railway infrastructure investment in China, ASEAN, and Japan remained firm.」

「Although some concerns about geopolitical risks remain, the global economy, including the United States and Europe, has remained firm. In Japan, the economy is on a gradual recovery trend, including an improving trend in capital investment. Railway infrastructure investment in China, ASEAN, and Japan has also remained firm.」

「The business environment surrounding the Group during the nine months ended 28 February 2017, from 1 June 2016 to 28 February 2017, improved against a backdrop of the US economic recovery and expectations for the new administration's policies, despite downside risks including the economic slowdown in China and ASEAN.」

「The business environment surrounding the Group during the first six months of the current consolidated fiscal year began amid caution resulting from the economic slowdown in China and ASEAN and the UK's EU withdrawal issue. However, expectations for the new US president's policies rose rapidly after the US presidential election, and conditions have been improving, with the dollar/yen exchange rate returning to its level at the beginning of the period. Railway infrastructure investment remained firm in China and ASEAN, while domestic investment also remained solid due to preparations for the Olympics and inbound tourism.」

「Overseas, the economic recovery in the United States continued, but uncertainty about the outlook increased due to slower economic growth in China and ASEAN and issues surrounding the United Kingdom's withdrawal from the EU. In Japan, companies became increasingly cautious about capital investment because of uncertainty overseas and the yen's appreciation.」

「The Group depends on the transportation and industrial business segments for the majority of its sales. The Group's customers operate businesses in Japan and overseas. Accordingly, economic conditions in each country, including economic trends and personal consumption, may affect the Group's business performance.」