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

On entering the second year as President


“Systems and mechanisms” to realize the Group’s growth

In my first year as President, I endeavored to strengthen thesolidarity of the Group and to change the awareness of our employees to a globally-oriented perspective, while remaining true to ULVAC’s corporate DNA of leveraging its “human resources,” upholding its corporate culture of boldly seeking out challenges and contributing to industrial and scientific advancement through thecomprehensive utilization of vacuum technology. Starting from fiscal 2018 (fiscal year ending June 30, 2019) I intend to speed up our reforms in an effort to cultivate new possibilities, as a “comprehensive vacuum equipment manufacturer.”

The drastic changes brought on by the wave of technological innovation and global competition have awakened a sense of urgency for the need to promote reforms that will ensure our survival. Although living in Japan tends to make us oblivious to the Group’s situation, I have witnessed the rapid changes taking place with our customers and on the market through my experience at the overseas bases.

I believe that it is also essential to utilize this very perspective of being outside looking in to reaffirm our strengths and potential. Through the manufacture of semiconductor production equipment and electronic devices production equipment, which promises growth in its peripheral markets, in addition to the manufacture of the current mainstay FPD (Flat Panel Display) production equipment, the Group has been displaying growth potential in a broad range of fields amid the wave of technological innovation. Our operating base capable of generating stable revenues including such businesses as the components and materials business and the customer support business may be counted as one of the Group’s strengths.

I intend to encourage our employees to speed up reforms while building “systems and mechanisms” to ensure that the entire Group is growing and heading towards the same direction. The center of these “systems and mechanisms” is “human resources.” We will focus on fostering human resources, the leaders of the future, and to establish the foundations for sustainable growth.

Review of FY 2017


Highest sales ever, record breaking profits for three consecutive terms

In fiscal 2017, orders received exceeded the previous fiscal year and the highest sales ever were achieved. Profitability also improved significantly, with all profit categories achieving record highs for three consecutive terms.

Orders received and net sales for FPD and PV production equipment remained strong, thanks to the continued high level of investments in LCDs for large-screen TVs and OLEDs for smart phones, particularly in China. Meanwhile, in semiconductor and electronic devices production equipment, there was a significant increase in production equipment for memory (NAND, DRAM, next generation non-volatile memory), backed by strong server demand. Additionally, orders received and net sales in components, materials and general industrial equipment also remained strong. In terms of profits, the growth in semiconductor and electronic devices production equipment was the main driver, while their high profit margins also contributed to the substantial increase in profit.

As a result, for fiscal 2017, on a consolidated basis, orders received increased 3.2% year-on-year to ¥243.0 billion, net sales increased 7.5% to ¥249.3 billion, operating profit surged 20.0% to ¥35.4 billion, ordinary profit rose 24.2% to ¥36.9 billion and net income increased 46.7% to ¥35.9 billion, due to the effects of posting deferred tax assets and gains from sales of stocks. Operating profit margin rose to 14.2% from 12.7% the previous fiscal year and the equity ratio improved significantly from 40.2% to 49.5%.

Change in the targets of the Medium-Term Plan


Upward revisions to the targets and announcement of a “Growth Strategy” for the next five years


The Three-year Medium-Term Plan (from fiscal 2017 to fiscal 2019) had originally aimed for “net sales of ¥250.0 billion” and “operating profit of ¥35.0 billion” on a consolidated basis in the final year of the plan. However, given that in the initial year we are already nearing the target for net sales and we have already overshot the operating profit target, the numerical targets have been upwardly revised to “net sales of ¥265.0 billion” and “operating profit of ¥38.0 billion.” No changes have been made to the framework of the plan in which “the promotion of business growth” and “the enhancement of value-creating capabilities” are key strategies, but we will secure further growth primarily in semiconductor and electronic devices production equipment and aim to achieve our new targets.

In addition, as for R&D investments (capital expenditures for R&D + R&D expenses), we will strengthen the development of logic and next generation non-volatile memory, as part of efforts to aggressively expand semiconductor and electronic devices production equipment, while proactively engage in development that will lead to  future growth.

Furthermore, while reviewing our Medium-Term Plan, we will also aim for “net sales of ¥300.0 billion” and “operating profit margin of 16%” on a consolidated basis five years from now, in the fiscal year ending June 30, 2023, as outlined in our “growth strategy” for our next leap forward.


Outlook for the current fiscal year and growth strategy

Steadily execute the growth strategy based on the Medium-Term Plan

The Group is focusing on the following themes as key points of the growth strategy based on the Medium-Term Plan.


By proactively expanding memory demand as well as tapping into the demand for logic, which is a new field for the Group, we will aim for growth in semiconductor production equipment in tandem with memory and logic. In an effort to capitalize on the flows for developing a smart society presented by the spread of 5G, we will promote joint development with our customers and demonstrate our flexible engineering capabilities in the electronic devices production equipment. In FPD production equipment, we will firmly maintain our market share of large-screen TVs by continuing to meet the market trend for continued long-term investments, while working to increase orders in line with the growing demand of OLED.

In the Chinese market, the main driver for the growth of such demand, we will take advantage of the strengths of our production system comprising 15 overseas Group companies and 1,757 employees (as of June 30, 2018) and our supply chain, to fulfill our optimal location development functions and service base functions to ensure further growth.

Assuming that we carry out the above efforts, for fiscal 2018, we are forecasting net sales of ¥255.0 billion (2.3% increase year-on-year), operating profit of ¥36.5 billion (3.3% increase year-on-year), ordinary profit of ¥37.5 billion (1.6% increase year-on-year) and net income of ¥25.5 billion (29.0% decrease year-on-year) on a consolidated basis.


【The Growth Strategy 】

• Semiconductors are poised to grow in tandem with memory and logic.
• Electronics are expected to grow owing to the business opportunities in technical innovation presented by 5G.
• In FPDs, continued long-term investment is expected primarily in large-screen TVs and OLEDs.
• Growth in components, materials, and customer support (stable base).
• Growth in the China market

Message to our shareholders


To continue to be an enterprise valued by society

Dividends are paid to our shareholders based on the policy of comprehensively taking into consideration the status of our financial base, consolidated financial performance for each fiscal year, the payout ratio and other factors. ULVAC paid an end-of-term dividend for fiscal 2017 of \95 per share (an increase of \45 per share from the previous fiscal year). The end-of-term dividend for fiscal 2018 is expected to be \105 per share, a further increase of \10 per share. We will continue to reward shareholders for their support, while enhancing the internal reserves necessary for further investments in growth and strengthening the financial base.

As I mentioned above, the Group is focused on fostering human resources, the leaders of the future, and establishing an even more powerful management base. By revitalizing education seminars, overseas assignments and exchanges with third parties to train next-generation executives and strengthen global human resources, while at the same time promoting workstyle reforms, the advancement of women, and health management to build a workplace where employees can feel excited about their work, we are further improving the environment where each employee can fully demonstrate his or her capabilities.

In recent years, efforts aimed toward the development of a sustainable society, including SDGs (the United Nations’ sustainable development goals) and ESG (environment, society and governance) are implemented on a global level. Efforts by private-sector companies are also required, as more and more companies are advocating the solution of social issues through business activities as management themes and proactively working on their solutions.

ULVAC recognizes its corporate social responsibility more than ever and will contribute towards achieving a sustainable society. The Group will make a concerted effort to solve social issues through joint creation with its stakeholders. We intend to further clarify the materiality (important issues) as a group through the promotion of sustainability-oriented management with a medium- to long-term perspective.

Our products and services contribute to energy-saving and the development of emerging countries. Going forward, we will create greater value by comprehensively utilizing vacuum technology, continue to be an enterprise valued by society and grow together with our stakeholders.


We, therefore, ask our shareholders for their continuing and long-term support.