1. Performance in the 57th fiscal year (Term ending December 2019)
Laptop connectors made a rapid recovery in the second half, driving business results
The electrical/electronic components business was sluggish in the first half owing to poor sales of mobile devices and a shortage of CPUs for laptop PCs. However, owing to a rapid recovery in demand for components after the CPU shortage was resolved, and an increased demand to update laptop PCs after Microsoft ended its support for Windows 7, the second half saw a significant growth in sales for full shield connectors, including micro-coax connectors and board-to-board connectors (our main products). A recovery trend regarding demand for HDD-related components for servers was observed, but overall sales were low owing to continued inventory adjustments made by HDD manufacturers. On the other hand, for 5G services (the next-generation mobile communication system), we have promptly introduced high-frequency full shield connectors to the market, and commenced sales.
While the automotive components business struggled with low worldwide automobile sales, it saw high sales in automotive sensors, thanks to an increased demand for components in the growing use of electronics in automobiles—such components contribute to higher fuel efficiency, lower burden on the environment, and greater safety performance. More automobile manufacturers adopted SMT connectors for the LED headlights of their automobile models, which have excellent vibration- and heat-resistance properties, and the automotive components business as a whole has updated its sales record for 7 consecutive terms.
The equipment business saw low earnings, as semiconductor manufacturers postponed their capital investments due to a worldwide recession.
As mentioned above, connectors for PCs in the electric/electronic components business have driven the Company's business performance—we have achieved increased income and profit, resulting in sales of 54 billion yen, operating profit of 1.5 billion yen, ordinary profit of 1.38 billion yen, and this fiscal year's net profit attributable to the parent companies' shareholders of 900 million yen. With these outcomes, we increased the term-end dividend per share by 5 yen to 20 yen, and determined the annual dividend including the interim dividend to be 25 yen.
2. Priority strategies for the 58th fiscal year (Term ending December 2020)
We will optimize our resources for the future and expand our Dantotsu (outstanding) product line-up
Electrical and Electronic Components Business
The full-scale use of 5G (next-generation mobile communication system) is being rolled out globally this term, which will accelerate the establishment of base stations for sending and receiving radio waves and the expansion of IoT (Internet of Things), in turn increasing the need for communication equipment in all kinds of fields that can rapidly process an enormous volume of data. Taking advantage of this opportunity, we will develop Micro Coaxial connectors and board-to-board connectors, which excel in high-frequency and high-speed transmission, and work towards expanding orders.
In our new product field, many human-assisting robot manufacturers and industrial equipment manufacturers asked us about our torque sensor ESTORQ, and we will focus on expanding sales of robot hands and other products that use it. Many companies newly adopted our components for medicolegal equipment and aircraft engines and various products for the medical and nursing care fields. We will continue to develop new products using our precision processing technology.
Automotive Components Business
Under the keyword CASE, the demand for new components is expected to expand owing to the growing use of electronics in automobiles, as there will be more electric cars and automatic driving assistance systems. With our business concerning automotive sensors and other electrical components, we will develop differentiated new products that combine our accumulated know-how in the field of electronic components with our know-how in automotive connectors, to expand orders in the next-generation mobility market and open up new applications.
We will launch a new model GP-PRO SP-G this term, which can mold larger semiconductor packages demanded in the automotive power device industry, and is compatible with ultra-slim packages for the commercial-product market. In combining our know-how for achieving a level of high quality for automobile products with the CCFC mold for manufacturing thinner packages, we will expand sales in the automotive field and the consumer-product market.
Our sensor nose@MEMS, which "visualizes" smell, won the Semi Grand Prix in the Device/Technology Category at CEATEC AWARD 2019 last year. The unprecedented "visualization of smell" is gaining attention in various scenes, including food, beverage, and nursing care. We have received a number of prototype requests from many customers, and will start selling the product this spring.
We will unify our trade names and corporate brands under I-PEX (from August 1, 2020)
Founded in 1963 as an expert precision mold manufacturer, we have been diligent in developing mold micromachining technologies, expanded our business into the connector and sensor field, and grown into a company that is marked by both the features of a manufacturer commissioned to make components, and one that offers proposals. We will unify our company names and corporate brands under I-PEX, with the goal to highlight that we strive for continuous growth as a manufacturing solution expert, who takes further steps beyond the current needs and creates new value, while increasing our brand awareness globally.
We bring our technological capabilities together to develop next-generation technology and create future benefit
In 2020, we will commence the first phase of operations at our new plant, DOC (tentative name), located at a 65,000 square-meter site in Ogori City, Fukuoka Prefecture, which we acquired for more production capacity. We will bring our technological divisions and personnel together there to produce greater results that normally couldn't be achieved alone. It also serves as an educational facility for handing down technology and know-how to future generations, who will be the support and driving force of the company, to continue to improve our corporate value.
We look forward to your continued support for the Group.