CEO Message

Junya Suzuki, President and CEO

Dear shareholders and investors,

Thank you for your continued support of the Nissha Group.

Overview of consolidated financial results
for the fiscal year ended December 31, 2023

During the fiscal year ended December 31, 2023, while the global economy picked up, manufacturing industries faced a severe business environment with weak product demand mainly due to the high inflation and the settling down of special demand caused by COVID-19, except for some industries such as mobility components. Although the U.S. economy recovered with a backdrop of firm consumer spending and employment situation, the European economy stagnated, weighed on by, among other factors, the high inflation, monetary tightening, and sluggish domestic and foreign demand. The recovery of China’s economy slowed down, affected by a decrease in domestic and foreign demand, as well as trade friction. Meanwhile, the Japanese economy recovered moderately as production activities in the electronic components sector weakened due to sluggish foreign demand.
Under these conditions, as for the Company’s operating results for the fiscal year ended December 31, 2023, product demand for mobility components remained firm in the Industrial Materials segment with easing of supply restraint, and demand increased for contract design/development and manufacturing services in the Medical Technologies segment in an active market environment. On the other hand, product demand for tablets significantly slowed down in the Devices segment due to the saturation of special demand caused by COVID-19, and product demand for metallized paper remained sluggish in the Industrial Materials segment due to prolonged inventory adjustment in the supply chain. In addition to these demand trends, profits were decreased by an impairment loss on goodwill mainly due to rises in discount rates at European subsidiaries that produce and sell sustainable materials.
As a result, regarding the consolidated financial results for the fiscal year ended December 31, 2023, net sales were ¥167,726 million (a decrease of 13.5% as compared to the previous year). Operating loss was ¥3,817 million (operating profit of ¥9,520 million in the previous year). Loss attributable to owners of parent was ¥2,988 million (profit attributable to owners of parent of ¥10,140 million in the previous year).

Plan for the fiscal year ending December 31, 2024

Concerning the global economic environment in the fiscal year ending December 31, 2024, we expect that the economy will trend toward a recovery backed by the easing of inflation and monetary tightening and a cyclical recovery in demand, among other factors. On the other hand, however, the economic outlook is uncertain due primarily to sluggish economic trends in China and Europe, foreign exchange fluctuations, and geopolitical risks.
Under these conditions, as for the operating results for the fiscal year ending December 31, 2024, demand for tablets in the Devices segment and for metallized paper in the Industrial Materials segment, which remained weak during the fiscal year ended December 31, 2023, is expected to gradually pick up. In the Industrial Materials segment, we expect that demand for decorative products will grow steadily, especially those for mobility components. Additionally, in the Medical Technologies segment, we project a steady rise in demand for our main field of contract design/development manufacturing services and contributions to our financial results from companies we decided to acquire in the fiscal year ended December 31, 2023.
As these results, for the consolidated financial results for the fiscal year ending December 31, 2024, we expect net sales of ¥186,500 million, operating profit of ¥5,800 million, profit before tax of ¥5,400 million and profit attributable to owners of parent of ¥3,700 million. These figures are based on an exchange rate of 1US$ = ¥135 for the fiscal year ending December 31, 2024.
  2023
Results
2024
Plan

Net sales

(Millions of JPY)

167,726 186,500

Operating profit

(Millions of JPY)

-3,817 5,800

Profit before tax

(Millions of JPY)

-2,762 5,400

Profit attributable to owners of parent

(Millions of JPY)

-2,988 3,700

In Conclusion

Our Mission is to use the diverse capabilities of our people and our Core Technologies as an engine for growth to create highly competitive, feature-rich products and services that offer value to customers and contribute to better lives for all. Guided by this Mission, we will move forward toward our medium-to-long term growth which leads corporate value improvement.

Once again, I want to thank you, our shareholders and investors, for your support to the Nissha Group.
February 14, 2024
Junya Suzuki
Chairman of the Board
President and CEO

Junya Suzuki

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