Message from the President

Be a 未来 - Creator as Your Partner Since its founding in 1947, Ryoden Corporation has constantly responded to changes in the market and region, and flexibly expanded its businesses. Now, as customers promote the diversification/globalization of management, Ryoden is also taking dramatic evolutionary steps forward.

 Warmest greetings to all valued shareholders of the Ryoden Group.

 During the consolidated cumulative second quarter, the global economy was characterized by ongoing steady growth in the U.S. but a conspicuous slowdown in the Chinese economy stemming from the U.S.-China trade friction. There is the possibility that the impacts of this situation will spread to the global economy as a whole. Furthermore, the global economy hereafter is becoming ever more uncertain due to the turmoil over the U.K.’s withdrawal from the EU and heightened geopolitical risks in the Middle East.

 With regard to the Japanese economy, moderate recovery has been observed, with increases in capital investment and improvement in the employment situation on the back of solid corporate earnings. However, there are concerns that the U.S.-China trade friction might bring about a deceleration in the domestic economy such as in the form of weak exports and a decline in capital investment.

 Among the industries in which the Ryoden Group operates, there continued to be strong capital investment demand in construction-related industries, but FA industries showed an ongoing weakness particularly with regard to the semiconductor manufacturing equipment and machine tool industries. Additionally, while there was steady demand for ADAS (advanced driver assistance system) in the automobile-related industries, these industries as a whole tended to show a downward trend.

 Meanwhile, the smart agriculture business (vegetable factories) has taken off on full scale and has shown significant growth.

 Amid this business climate, the Ryoden Group is accelerating the application of a customer value-creating business model that can adapt to changes in the business environment and pursuing this term’s business activities under a vision for increasing profitability with the aim of attaching higher added value to existing core businesses, establishing a business model for growth businesses, and creating new, next-generation businesses.

 As a result, the Group’s financial results for the consolidated cumulative second quarter saw net sales of 115,233 million yen (2.3% decrease from the previous period), operating profit of 2,783 million yen (17.7% increase), ordinary income of 2,845 million yen (21.6% increase), and quarterly net profit attributable to the owners of the parent company of 1,938 million yen (20.3% increase).

 In fiscal 2019 we forecast consolidated net sales of 233,600 million yen, an operating profit of 5,300 million yen, an ordinary income of 5,300 million yen, and profit attributable to the owners of the parent company of 3,700 million yen.

 We thank you for your patronage and hope you will continue to favor us with your support.

Nobuo Shogaki

* Please note that all forecasts of financial results and other forward-looking statements are based on assumptions we judge to be rational at this point in time, and that actual performance results may differ from those projected above.