Setsuo Iwashita, President and CEO
拡大
Setsuo Iwashita, President and CEO

Business results for the FY2023/6

Both sales and profit decreased compared to FY22/6, but orders received and sales steadily increased for semiconductors & electronics device production equipment and components, and other products

 

In FY23/6, the global economy remained on a gradual recovery track, but uncertainty increased, mainly because of the rising prices of various parts and materials and supply chain disruptions amid growing geopolitical risks and growing concerns about economic recession mainly due to global monetary tightening.

 

Regarding the business environment in which the ULVAC Group operated in FY23/6, in the semiconductor sector, a slowdown was apparent in capital investment by semiconductor manufacturers in the short term, in line with the deceleration in demand for items such as smartphones and personal computers. However, in the medium- to long-term, the demand for semiconductors is expected to expand, partly due to expectations for generative AI, and plans for the construction and expansion of semiconductor plants are underway around the world, mainly as a response to geopolitical risks. In the electronics sector, there has been a continued expansion of investment in power devices in line with the progress of measures to promote the adoption of EVs based on green energy and other policies, technological innovation and investment to increase the production of various electronic devices to achieve the promotion of digitalization based on the concept of a smart society and the metaverse, and investment based on China’s policy of shifting to the domestic production of electronics. In the flat panel display (FPD) sector, investments in large-sized organic light-emitting diode displays are expected to grow as IT panels for tablets and personal computers have been replaced by organic light-emitting diode displays from LCDs in recent years. In the industrial battery sector, investment in mass production aimed at realizing smaller, higher-capacity and safer EV batteries is starting in earnest.

 

In this environment, for FPD production equipment, both orders received and net sales decreased year on year due to a reactionary decline after vigorous investment in liquid crystal displays (LCD) for IT panels in FY22/6. On the other hand, orders received and net sales increased year on year for semiconductor production equipment, due mainly to investment in logic, and also increased for electronics device production equipment due mainly to vigorous investment in power devices and optical devices, as well as vigorous investment aimed at shifting to domestic production in China. Likewise, for components, orders and net sales both increased year on year, with a strong performance from production equipment for semiconductors, electronic devices, and EV batteries, as well as vacuum pumps, measuring equipment, and power supply equipment for use in consumer devices.

 

As a result, consolidated business results for FY23/6 saw a decrease in both sales and profit due to factors such as the decline in net sales and an increase in R&D expenses for semiconductors-related and other products, which are upfront investments. Orders received decreased 8.5% year on year to ¥247.2 billion, net sales decreased 5.7% to ¥227.5 billion, operating profit decreased 33.6% to ¥19.9 billion, ordinary profit decreased 28.9% to ¥22.9 billion, and profit attributable to owners of parent decreased 29.9% to ¥14.2 billion.

Review of the previous mid-term management plan

Although profit margins fell short of the planned levels due to the impact of longer delivery times for parts and materials, orders received exceeded the plan in growth areas

 

The previous mid-term management plan, “Breakthrough 2022” (covering the period from FY21/6 to FY23/6) brought growth of 1.6 times in orders received compared to FY20/6, driven by growth drivers such as logics for semiconductors, power devices, and various electronic devices, which the ULVAC Group has identified as growth areas. Net sales also exceeded the planned levels due to the expansion of customer investment in these semiconductors and electronic devices businesses. However, longer delivery times for procured parts and materials due to factors such as supply chain disruptions arising from geopolitical factors resulted in profit margins falling short of the planned levels.

 

The specific initiatives of “strengthening the growing business” and “strengthening research and development” under the previous mid-term management plan produced results including the expansion of orders including the entry into new processes in the semiconductors business, the expansion of orders for power devices and optical devices in particular among the ULVAC Group’s five focus areas in the electronic devices business, and the launch of mass production of evaporation roll to roll equipment for EV batteries in the FPD business. Regarding our other specific initiatives of “enhancing manufacturing capabilities” and “strengthening management basis,” we have pushed ahead with the integration of domestic and overseas subsidiaries and the establishment of various systems to improve productivity.

Launching the new mid-term management plan

Aiming to create social value through vacuum technology and enhance profit and capital efficiency-oriented management

 

The ULVAC Group has established its Vision 2032 — Continue to be a “Field of Potentiality” for the Future — and determined materiality in light of this vision. We formulated the new mid-term management plan covering the three fiscal years from FY24/6 to FY26/6 based on Vision 2032. In this new mid-term management plan, we have established the priority strategies of “strengthening product competitiveness in growth businesses,” “improving global productivity,” and “strengthening management basis” under our basic policies of “creating social value through vacuum technology” and “enhancing profit and capital efficiency-oriented management.”

 

Under the new mid-term management plan, we will first strengthen product competitiveness in growth businesses by focusing on semiconductors, electronic devices and battery markets as growth drivers that can be expected to provide medium- to long-term growth. We will strengthen research and development in business fields that are related to these growth drivers. We will improve global productivity through planned production expansion and the promotion of digitalization to support this expansion. In this way, we aim to boost the ULVAC Group’s comprehensive manufacturing capabilities and further improve global productivity. In terms of strengthening our management basis, we will strengthen ESG management, strengthen our financial basis and CF management, and promote human resource management, aiming to reinforce the foundation of our business activities to achieve the goals of the new mid-term management plan.

 

Under the new mid-term management plan, we aim to achieve numerical targets for the consolidated business results for FY26/6 including net sales of ¥300 billion, gross profit margin of 35%, operating profit of ¥48 billion (operating profit margin of 16%), ROE of 14%, and operating CF (cumulative total for 3 years) of ¥63 billion.

Earnings forecast for FY2024/6

We expect an increase in sales and profit due to the continuing growth of our semiconductors and electronic devices businesses

 

Regarding our consolidated earnings forecast for FY24/6, we are targeting an increase in both sales and profit, with orders received of ¥250.0 billion (+1% year on year), net sales of ¥245.0 billion (+8%), operating profit of ¥23.0 billion (+15%), ordinary profit of ¥24.5 billion (+7%), and profit attributable to owners of parent of ¥16.0 billion (+12.9%).

 

Our forecast for orders received is based on our expectation of growth especially in advanced logic in the semiconductors business and power devices in the electronic devices business. In addition, we expect orders of evaporation roll to roll equipment for EV batteries in the FPD business. By strengthening our comprehensive manufacturing capabilities through measures such as planned production expansion to meet the forecast level of orders, we aim not only to increase net sales but also to boost the gross profit margin and operating profit margin.

Message to our shareholders

The ULVAC Group will strive as one to achieve the goals of the new mid-term management plan. We will keep our sights set on Vision 2032 — Continue to be a “Field of Potentiality” for the Future — as we implement our initiatives to achieve this new mid-term management plan.

 

The ULVAC Group will create economic, social, and environmental value by comprehensively utilizing its vacuum and peripheral technologies, thus enhancing corporate value. We look forward to your further understanding and support.

 

September, 2023