Thank you for your continued support of Noritsu Koki.
I would like to provide an update on the Group’s business activities and performance from the first half of FY12/2025 (January 1 to June 30, 2025).
We lowered our earnings forecasts for the first half of FY12/2025 when we announced first quarter results in order to reflect the impacts of US tariff policies. Overall, however, our businesses performed steadily. In particular, sales at AlphaTheta and JLab in the audio equipment/peripherals business were brisk, resulting in higher revenue compared to the same period last year and versus our revised forecast, while operating profit and net profit also came in higher than our adjusted forecasts.
Please note that we have applied for the new IFRS 18, Presentation and Disclosure in Financial Statements, from the first half of FY12/2025. In doing so, we aim to reduce the impact of fluctuations in forex valuations on operating profit despite a high balance of foreign-denominated cash and deposits, thereby allowing for a clearer understanding of business results.
While the application of this standard will officially start from January 1, 2027, we believe that the early application from this fiscal year, the first year of our Medium-Term Management Plan FY30, is appropriate in our situation.
One point in the plan worth mentioning is the establishment of a challenging quantitative target for capital efficiency in the form of an ROE of at least 10%. Also, in addition to a dividend payout ratio of over 40%, we have also introduced a new target for DOE (dividend on equity). We will aim to improve capital efficiency while also delivering shareholder returns that are more generous than ever before.
Our basic policy for our existing businesses is to sharply pivot toward strengthening the supply chain. To that end, we have decided to make some investments on an unprecedented scale; AlphaTheta will invest ¥8 billion in the construction of its own factory, JLab will allocate ¥1 billion to the establishment of its own warehouse, and Teibow will spend ¥6 billion on the construction of a new MIM plant.
In addition, regarding sustainability management, in FY12/2024, we established a system for calculating Scope 3 GHG emissions and developed and published procurement guidelines, thereby strengthening our supply chain management system with consideration for the environment and society. As to human capital management, in order to encourage the growth of employees and enhance the overall capabilities of the organization, we have started to enrich the content of our training programs, in addition to ensuring employees have enough time to engage in professional learning.
We are operating in a highly uncertain environment, not to mention the impact of US tariff policies. However, as a business group that continues to create “No. 1/Only 1,” we are outlining growth plans aimed at maintaining and expanding our existing businesses while also planning new ventures within each Group company.
In the Medium-Term Management Plan FY30, we have set more aggressive quantitative targets, and while we intend to maintain our basic policies, we will also make every effort to achieve these targets. I kindly ask all shareholders to continue supporting the Group from a long-term perspective.
September 2025