To Our Stakeholders
Our operations have been affected by the COVID-19 pandemic, but we will manage them with our sights set on medium- to long-term growth while taking every precaution to prevent the virus's spread.
Chairman of the Board and President,
FY2020 Business Environment and Operating Performance
In FY2020, ended March 31, 2021, global economic conditions worsened precipitously in response to the COVID-19 pandemic. Even before the end of the pandemic was in sight, the global economy began to gradually recover from the fiscal second quarter by virtue of anti-pandemic measures and economic stimulus policies.
Amid this operating environment, our sales embarked on a recovery from the second quarter after plunging in the first quarter. The Semiconductor Industry segment in particular managed to achieve year-on-year sales growth. In response to our overall decline in sales, we endeavored to cut fixed costs throughout FY2020 through various means, including by using online videoconferencing to reduce travel expenses.
As a result of such efforts, we earned operating income of ¥5,802 million, ordinary income of ¥8,447 million and ¥4,010 million in profit attributable to owners of the parents (respect ively up 0.5%, 24.9% and 37.9% year on year) on net sales, which were down 8.2% to ¥130,513 million.
The Automotive and Construction Machinery Industries segment's net sales and operating income decreased year on year and fell short of our forecast in the wake of global auto production cutbacks that broadly depressed auto parts demand, though production started to recover by the fiscal year end, mainly China.
The General Machinery Industry segment's net sales and operating income likewise decreased year on year and fell short of the forecast in Japan, India and the Asia-Pacific region, where we have operational and management responsibilities under the EagleBurgmann alliance . The alliance's sales were reduced by lockdown restrictions in India and customers' production cutbacks /shutdowns in the Asia-Pacific region and Japan.
The Semiconductor Industry segment's net sales and operating income grew year on year and exceeded our forecast as a result of robust investment in 5G and data centers.
The Marine Industry segment grew its operating income, largely by improving its margins on sales to the newbuild market, even as its net sales decreased against a backdrop of continued sluggish demand from shipbuilders globally.
The Aerospace Industry segment's net sales were down as a result of delayed sales of space-related products in addition to a slump in the aviation market due to the pandemic. Its operating income, however, increased year on year by virtue of sales mix improvement.
The EKK Group's Business Environment and Future Course
In FY2020, we faced restrictions on our business activities in every country in which we operate and weaker market demand across all of our businesses due to the pandemic. Nonetheless, we achieved income growth despite decreased net sales through measures to ensure profitability, including cost-cutting and deferment and stringent screening of capital investments.
In FY2021, countries globally are moving forward with vaccinations and other anti-pandemic measures while reopening their economies, but risks persist, including the spread of COVID variants . We will accordingly continue to place top priority on ensuring the safety of our employees and their families through ant i-pandemic measures while keeping our businesses running. In light of the prevailing operating environment, we have replaced our three-year management plan launched in FY2020 with a new two-year plan, effective from FY2021.Under our new plan, we will swift ly lay the groundwork for earnings recovery in FY2021-22.
In particular, realizing a sustainable society while mitigating climate change in the process has become an urgent task for all companies. We will further accelerate decarbonization of our business activities and ongoing development of proprietary next-generation technologies and products that contribute to environmental preservation and energy efficiency, targeting next-generation automobile and energy markets. By offering such products and technologies to customers and markets, we will help resolve societal problems through our operations, earn adequate profits and grow the EKK Group over the medium to long term.