Current page

Message to Investors

Record Quarterly Sales Driven by Robust Demand Growth for Industrial Robots

The Group’s business environment for the consolidated cumulative first quarter under review (April 1 through June 30, 2017) remained generally favorable, buoyed by the recovery in the Japanese economy, continuing strength in the global economy, and increased capital investment in pursuit of improved productivity, laborsaving and other purposes in themanufacturing industry.

Viewed by category of application, compared to the first quarter of the previous fiscal year, healthy upward trends were recorded in sales of industrial robots used to automate production of automobiles, smartphones, household appliances and other products. Growth was likewise posted for memories and sensors, devices used in the production of semiconductors for image processing and other objectives, manufacturing equipment for high-definition LCD panels known as 4K and 8K, organic EL panels and other flat panel displays, gear heads for motor manufacturers and most all other major applications. Meanwhile, following this March’s acquisition and consolidation as a group subsidiary of the German company Harmonic Drive AG, previously an equity method affiliate, the inclusion of that company’s sales in the Group’s consolidated net sales total from this consolidated cumulative first quarter was also a factor in raising the Group’s revenue.

As a result, net sales for the consolidated cumulative first quarter of the current fiscal year expanded by 72.2% to 12,511 million yen.

Under earnings, operating income rose by 48.9% year-on-year to 3,034 million yen. Despite high depreciation expenses linked to investment targeting greater production capacity in anticipation of upcoming demand growth, as well as the listing of goodwill amortization accompanying the acquistion of Harmonic Drive AG, the profit generated from the rise in sales exceeded those costs in support of higher income. Ordinary income for the quarter increased by 46.3% year-on-year to 3,046 million yen. Though interest expenses climbed due to added borrowings, the shift in the foreign exchange rate to depreciation of the yen enabled listing of exchange gains,which combined with other factors to contribute to this growth. Net income attributable to shareholders of the parent during the first quarter grew by 30.9% year-on-year to 1,785 million yen.

By product segment, net sales were 10,207 million yen for speed reducers (up 76.4% year-on-year) and 2,304 million yen for mechatronics products (up 55.9% year-on-year), accounting for 81.6% and 18.4% shares of the Group’s total net sales, respectively.

Emphasis on enhancement of corporate value over the medium to long term

The figure below shows the trend of HDS’s net sales since its foundation and its relationship with application into new fields that lead to such results.

History of Sales(Non-consolidated basis) Million ¥ Demand Drivers Working Machines Robotics Semiconductor Equipment Flat Panel Display Manufacturing Equipment

Most of the HDS Group’s products are built into industrial products, such as machine tools and robots.
Therefore, our short-term sales are strongly influenced by the trend of capital investment in Japan and overseas. However, we have achieved growth over the medium to long term by shifting to application into new fields capable of spearheading growth in line with the progress of technology.
The Group’s performance inevitably will fluctuate in the short term depending on the capital investment trend. Nevertheless, by emphasizing enhancement of corporate value over the medium to long term, we are endeavoring to strengthen competitiveness as a highly skilled precision engineering specialist delivering Total Motion Control.
For this purpose, we are strengthening collaboration among HDS Group companies in Japan, Europe, the U.S., and China and implementing globalization strategies covering all aspects of sales, development, and production.
On the quality front, having set out a clear policy of giving highest priority to quality improvement, we are carrying out management initiatives emphasizing quality, while strengthening the quality management structure of the Group to enable stable provision of high-quality products to increasingly global markets. On the research and development front, through advanced application of our existing technologies, we are working to develop high added value products in a short time, and to expand our product variations to meet diverse customer needs. We also seek to make our existing products significantly more competitive, by taking on highly challenging development themes and further strengthening our core technologies. In the sales and marketing area, recognizing rapidly growing Asian markets as key targets for our products, we are carrying out an integrated marketing and sales strategy for Japan and Asia, enhancing our problem-solving ability and introducing new products, in order to raise our competitiveness in major markets. As for production, our aims are to increase the superiority of our skills, while making efforts to further improve quality and cost-competitiveness and shorten delivery times.

As we move forward, we greatly appreciate your continued support.

August 8, 2017
Mitsumasa Ito, Chairperson
Akira Nagai, President and CEO