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Home  >  Investor Relations  >  Message for Shareholders

Message for Shareholders

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(Updated July 2018)



Closing the 72nd period

I would like to express my heartfelt gratitude to every single one of you for your ongoing cooperation and support.


It has been a little over a year since assuming office as President in April last year. From the start, I have been promoting within the Company the catchphrase “we are a change-readiness business” while we have been carrying out concrete measures to respond to our dramatically changing markets.


This proactive attitude has brought us success. Our operating results for the fiscal year returned record-high results for net sales and each category of profit. Also, these results exceeded the targets we announced in our business plan. Our revenue environment, particularly for production equipment was extremely strong, with unprecedentedly favorable conditions in the machine tools sector.


Specifically, in the overseas business, which has strengthened as a result of our focused attention, net sales increased 40% year on year, and the overseas business’s share of total revenues expanded roughly from 16% to 20%.
For countless reasons, like those related to business with overseas EMS (Electronics Manufacturing Service) companies, the base of this success is clearly Yamazen’s progress in globalization achieved since two years ago, and the gradual emergence of the effect of synergy arising from the business restructuring that unified the domestic production equipment business with the overseas business has contributed to the above results. Furthermore, we seem to be progressing firmly in our efforts following the restructuring.



Meanwhile, in the consumer goods business, amid lagging recovery of personal consumption, the soaring costs of logistics and transportation have added to the difficulties to create arduous business conditions. Nevertheless, squarely addressing this stringent environment, Yamazen was able to maintain performance at a certain level.Both the building materials business and home products business have been making rapid progress with both revenues and profit increasing in the previous fiscal year. Amid this giant market, the Company has started promoting an aggressive sales strategy of “continuing to grow in the future through persistent efforts.”



Thanks to the support of our stakeholders, in the fiscal year, Yamazen, though falling a little short for net sales, mostly cleared the final-year targets of “net sales of ¥500 billion and ordinary profit of ¥15 billion” of the three-year medium-term management plan, whose last year is the fiscal year ending March 31, 2019, one year ahead of schedule. In my communications within the Company and with stakeholders, I had been constantly saying that “the figures of net sales of ¥500 billion and ordinary profit of ¥15 billion in the business plan is a symbolic line that we must pass in order to move on to the NEXT STAGE as a trading company.” In other words, it marks one of Yamazen’s important milestones where we must now further advance to a new business stage. It has always been the case that in terms of net sales, we need to ensure our proposal capabilities as a specialized trading company and our organizational sales capabilities advance to the next level. Put simply, we need to “strengthen our trading company functions while taking a customer-oriented perspective.” The real goal at the heart of my internal and public announcements has been to surpass these numerical targets and begin moving forward toward the next business stage.



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Toward NEXT STAGE

Now, entering the 73rd period, we are moving on to the next business stage and beginning new challenges. The activities we have carried out to expand our sales were not simply carried out to chase volume. Rather, they have been a means for achieving a future goal: “to become a company that can achieve sustainable profit growth.”


In terms of what is conceptually important for the Company. I think that Yamazen’s biggest advantage is its absolute strength as a trading company. As a trading company, we can provide a broad assortment of merchandise that a single manufacturer cannot. Yamazen trades the merchandise and systems of a wide range of companies from the large corporation to the high-tech startup. There are already many people in the market vouching for Yamazen, saying things such as, “Entrust it with Yamazen, as they can provide it all. Also, if anything happens, there is nothing to worry about, Yamazen is simply the better choice.” This is the strength that we are working to maximize both in Japan and overseas. This is the reason we believe it is important to further enhance the accumulation of our knowhow, including that of high-tech fields, and why it is essential that we increase our experience in diverse areas.


Fortunately, inside Yamazen, there has been a long-held corporate culture where it is “unacceptable to simply maintain the status quo.” This culture flows through the company like DNA, constantly being handed down to the younger generations. This DNA of ours is integral to Yamazen’s “sustainable profit growth”; it drives us to seek out proposals for high-tech businesses that allow us to establish specialized organizations while contributing to society, for example, by coming up with new solutions businesses or engineering functions for the production equipment market or by proposing Net Zero Energy Houses (ZEH) for the consumer goods market.


At the same time, Yamazen continually works to strengthen and enhance its local-region based sales operations that utilize the “human capabilities” of each employee, without differentiating between operations in Japan and those globally. To do this effectively, Yamazen creates mechanisms to make this possible. Commencing the 73rd period, we have changed the organizational structure and management efforts will be focused on enhancing Yamazen’s capability of delivering region-specific response.


Yamazen now has in place a system that generates even greater synergy by clearly providing the roles of two organizations: the horizontal organization, whose axis runs across the regional H.Q. structure and which provides “area strategies” and “customer response” to address the special qualities and needs of each region, and the vertical organization, which focuses on specialized expertise and oversees the product strategies.


Now the Company is moving onto the NEXT STAGE, we are implementing challenging new initiatives aimed at enhancing the function and value as a trading company as we turn our minds to thinking about what to change, and how to do so. Nevertheless, there will be absolutely no changes to the parts that have been integral to Yamazen. In other words, the values held by Yamazen the trading company in the two markets of production equipment and consumer goods have been and always will be “to observe what customers want from Yamazen and to deliver what they expect.”
Constantly upholding this philosophy, we will continue in the future to squarely address customers’ needs by supplying goods and services from a customer-oriented perspective.


Aiming to be 100-year-old company

Yamazen has now begun initiatives for new areas of focus such as the provision of engineering functions. It will be simple to create new companies and new organizations. However, the much more important tasks of creating the business and growing that business will be far more difficult.


As we take on the various challenges, our most important task will be to get the employees of Yamazen to understand the goals and purposes of these activities and spread this awareness throughout the entire company to enhance our capability to carry out our business. Doing this will both allow us to continue contributing to our customers, while we grow our business.


The 73rd period is the final year of the current medium-term business plan. However, we have upwardly revised the final targets under this business plan. We will therefore move onto a higher business stage and pursue sustainable profit growth as “always useful Yamazen.”


Regarding the return of profits to shareholders, the Company strives to establish a stable financial foundation and enhance its revenue earning capabilities. We therefore uphold a policy of shareholder return of providing stable dividends to shareholders while considering the level of profit earned by the Company. The annual dividend for the 72nd period came to ¥32.50 per share, comprising ¥30 for an ordinary dividend and ¥2.50 for a special dividend. The forecast for the annual dividend for the 73rd period is also currently ¥32.50 per share, incorporating an amount equivalent to the 72nd period’s special dividend of ¥2.50 into the ordinary dividend. Yamazen is aiming for a 30% average dividend payout ratio for the three years of the medium-term management plan.


Last year, we celebrated Yamazen’s 70th anniversary. Now, as we turn our sights to Yamazen’s “100th anniversary,” we believe it is important to understand this point in time as the starting block from which we will aim for the NEXT STAGE. Right now, our 100th anniversary feels like something in the distant future; but it is really closer than it seems. By the time that employees who are currently in their thirties become senior management, the Company will be celebrating its 100th anniversary. We will use this long-term outlook as part of our endeavors to build a valuable company that continues to be useful in the market as it works together with its partners.


In closing, we sincerely ask for your further cooperation and support.