For Shareholders/Investors

Establishing a new company-wide sales headquarters Shifting resources to key markets and switching to the offensive

Performance in the 56th fiscal year (Term ending December 2018)

Record sales, but decline in profits as a result of the in demand and intensified competition

In Electrical and Electronic Components Business, sales of Micro Radio Frequency (RF) Coaxial connectors were sluggish due to a stagnant smartphone market, increasingly intense competition, and a decline in demand for IoT. Sales of Micro Coaxial connectors did not increase as expected due to slow sales of laptops. Meanwhile, Board-to-Board (FPC) connectors showed healthy sales growth due to the fact that full shield connectors for high frequency noise prevention, which are among our "Dantotsu" products, are being used in more laptops and tablets. The demand for HDD-related components in servers and games consoles was steady with little change, but its overall sales were weak due to the decline in demand for use in computers. Besides the above, sales of the ESTORQ torque sensor, another of our "Dantotsu" products, for use in industrial robots, have increased.

In Automotive Components Business, automotive sensors that contribute to the improvement of eco-friendliness, fuel consumption, and safety performance fared well, thanks to increasing demand for parts due to advancements in automotive electronics. SMT connectors, which have excellent heat and vibration resistance, broke our Automotive Components Business's sales record for the sixth consecutive fiscal year. More and more car models are using the connectors for their LED headlights, which has boosted sales significantly.

As for Equipment Business, demand for semiconductor memory decreased because of the economic slowdown caused by intensified trade friction between China and the U.S., as well as other factors. However, self-driving and electric vehicle technology is advancing, and demand for automotive semiconductors remains strong, which enabled us to increase sales of semiconductor resin molding equipment and molds.

Thus, the struggling connector sales of Electrical and Electronic Components Business were made up for by the strong performances of Automotive Components Business and Equipment Business, and we increased our revenue and achieved 52.6 billion yen in sales. However, as a result of intensifying competition, we experienced reduction in profit, with 0.7 billion yen in operating profit and 0.6 billion yen in ordinary profit. In addition, with our future growth in mind, we decided to dispose of products and fixed assets that would not create cash in the future, and book impairment losses. This resulted in us posting a net loss of 1.8 billion yen attributable to parent company shareholders for the fiscal year. We are very sorry to inform all our shareholders that, owing to these results, the year-end dividend is 15 yen per share?5 yen less than the previous fiscal year?and the annual dividend, including interim divided, is 20 yen.

Priority strategies for the 57th fiscal year (Term ending December 2019)

Distribute resources with a focus on mobility devices, 5G, robotics, and medical devices

Electrical and Electronic Components Business

In Japan, 5G service (the next-generation mobile communication system) will begin this year. As IoT technology progresses, more and more things that previously were not equipped with wireless communication functions now are, and it is expected that the market for IoT-related products will grow rapidly. With this in mind, we have been preparing for business tied to 5G, and this year, we expect to see the results. Meanwhile, data transmission within devices will become even faster, and the need for noise control during high speed transmission is expected to grow. Therefore, we will focus on expanding sales of full shield connectors, mainly those for use in laptops and servers. We will work on gaining orders for HDD-related parts, particularly those for use in large-capacity servers. We will continue to focus on expanding sales of the ESTORQ torque sensor in the fields of robotics manufacturing, medical and nursing care services, and industrial machinery, while rolling out new applications for any and all needs related to automation?for example, robot hands that use the ESTORQ.

Automotive Components Business

Our heat- and vibration-resistant SMT connectors for LED headlights are being used in more and more car models. However, there is still room to grow, so we will focus on expanding their sales. Furthermore, it is expected that demand for parts will grow, particularly for those used in next-generation vehicles, due to progress in the realms of electric cars and automotive digitization. Therefore, we will focus our resources on these fields, and continue to strongly push toward development and expanding sales for our new products?products which are set apart by the combination of our expertise in automotive connectors and connectors that we developed for electronics. In addition, we will work toward receiving more orders for sensors for next-generation vehicles and other products.

Equipment Business

We will also put effort into expanding sales of molding equipment, particularly those for automotive power devices whose market is expected to grow. Additionally, we will continue with our efforts to apply the molding technology and equipment technology that we have developed for semiconductor manufacturing to other fields such as health care, and enter the machinery and equipment business in fields other than those related to semiconductors.

MEMS Devicies

We announced the development of nose@MEMS, a sensor that makes smell visible, two years ago, and are now moving forward with user verification testing. At the Wearable Expo held in January of this year, we presented the results of joint testing conducted with Toppan Printing Co., Ltd. The results showed that the sensor could distinguish between the scents of four kinds of black coffee available on the market with an accuracy of about 90%. The sensor can be as a substitute for sensory testing on foods, drinks, and cosmetics, and in many other scenarios where smell is a key factor, and we have high expectations for it. Its development is in the home stretch toward its launch, set for autumn this year.
Our MEMS ultrasound sensors, announced in January last year, are being updated for the purpose of commercialization, as well. This sensor's biggest feature is that it is the thinnest sensor with a drive mechanism available in the industry.* We are expecting that this sensor will be used in a wide range of applications in which devices are required to become smaller and smaller in size.

* Based on research by our company.

On a stable growth trajectory with selectiveness and focus

In our 57th fiscal year, we will roll out initiatives that give due focus to mobility devices, 5G, robotics, and medical devices, the markets for all of which are expected to grow. In order to carry out these initiatives, we will establish a new sales headquarters to carry out business strategies that are more effective and involve the whole company, and pour our efforts into redesigning and streamlining our production system. In addition, we will continue with our approaches to produce "Dantotsu" products, which, in the future, will become our signature products and generate over 20% of sales in each business area. Led by these initiatives to a stable growth trajectory, we will increase our corporate value.

I would like to ask all our shareholders to continue the kind support they show our group into the future.