New Mid-term Management Plan
Progress on the previous mid-term management plan (covering the period from FY2017 to FY2019) began strongly, but the results for FY2019 fell short of performance targets, due to factors such as struggling sales of OLED production equipment for smartphones, a cyclical downturn in investment in LCD production equipment for large-screen TVs, reactionary decline in investment in semiconductor memory, and compounded by the impact of COVID-19.
On the other hand, we made steady progress on the key strategy of “promoting business growth” and “enhancing the power of value creation.” For semiconductor and electronic devices production equipment, we achieved growth in electronic devices such as communications devices and power devices, and the entry into the logic field. For FPD and PV production equipment, we collaborated with leading companies to begin development of next-generation large OLEDs. We also launched manufacturing innovations.
The ULVAC Group has established and initiated the new mid-term management plan “Breakthrough 2022” (covering the period from FY2020 to FY2022). Under this plan, we apprehend the trend of technological innovation for a smart society as a business opportunity, and will achieve sustained growth and high profitability under the basic policy of “Investment in Development for Growth (Selection and Concentration)” and “Profit-oriented management through structural change.” We will expand investment for the growth in semiconductors and electronic devices, to strengthen the growing business. Regarding research and development, we will strengthen product development in response to technological innovation in growth markets. We will also promote production reform on all processes from engineering and design to the production system, aiming to improve profit margins.
Outlook for FY2020
The business environment at present continues to be pervaded by a sense of uncertainty regarding the future outlook, with the persistence of US-China trade friction and the possibility that the COVID-19 pandemic may continue for a substantial period of time. However, at the same time, we are witnessing increasingly vigorous investment related to semiconductors and electronic devices, in line with the progress of above-mentioned technological innovation for a smart society.
Sales and profit are anticipated to decline substantially in FY2020, due to a much lower order backlog at the beginning of the fiscal year, but we expect the orders received to increase, primarily for semiconductor and electronic devices production equipment, and FPD and PV production equipment. The operating profit margin will improve due to the progress of manufacturing innovations.
For FY2020, on a consolidated basis, we forecast orders received of ¥180.0 billion (+15.0% YoY), net sales of ¥165.0 billion (-11.0%), operating profit of ¥15.0 billion (-6.0%), ordinary profit of ¥16.0 billion (-11.4%), and net income of ¥10.0 billion (-7.1%).
Message to our shareholders
We have determined that the year-end dividend will be ¥80 per share. We plan to pay a year-end dividend of ¥70 per share for FY2020.
The ULVAC Group can contribute to achieving lower power consumption and a smart society, to resolve social problems on a global scale, by helping to bring about greater refinement and higher performance in semiconductors where investment is showing signs of resumption and electronic devices, through its strength in vacuum thin film processing technology.
The ULVAC Group has established a sustainability policy of “creating economic value, social value and environmental value, through the comprehensive utilization of its vacuum and peripheral technologies.” Through our business activities, we will contribute to the development of industries and science, together with a broad range of stakeholders, and pursue fair and reasonable profits by reducing environmental impact and creating health and happiness. We have already launched initiatives to resolve the environmental issues that threaten global sustainability, such as the climate crisis and materials shortages.
We hope for the understanding of all of our shareholders that the company is taking on new challenges, and look forward to your continued and increased support.