Integrating the virtual and the physical

The Last Inch to IoT


General Outline


Financial Results (Kessan Report) for FY2013

The SATO Group's management objective is to establish sustainable growth capability and revenue base in accordance with its basic strategy to “pursue globalization and maximization of customer value.” To this end, the SATO Group has compiled the necessary measures in the Medium-term Management Plan (from the fiscal year ended March 31, 2013 to the fiscal year ending March 31, 2015), which is being implemented by group-wide efforts.

The above activities led to financial performance surpassing the initially announced forecasts owing not only to sales recovery and improved profitability in business overseas in particular, but also the development of proposal based sales in line with improvements in business sentiment in Japan as well. The SATO Group recorded an increase in net sales, up 10.9% from the previous fiscal year to ¥96,773 million and an increase in operating income, up 23.9% to ¥6,758 million. Ordinary income increased by 30.5% to ¥7,084 million and net income increased by 57.5% to¥4,295 million, setting new record highs for both sales and profit.

By segment, the SATO Group reported the following:

<Japan>

During the fiscal year ended March 31, 2014, while there had been limited demand for streamlining operations from non-manufacturing industries such as the transport industry in the first half of the fiscal year, the second half of the fiscal year showed a trend of recovery, even for the manufacturing industries, due to growing consumer spending. In line with these improvements in business sentiment, we actively expanded our sales activities and began to see more pronounced results from development of new applications. Our base business grew steadily thanks to new vigor in inquiries for mechatronic products, mostly electronic printers, and recovering demand for supply products. Moreover, in the fourth quarter, business inquiries related to the change in the consumption tax rate also contributed to financial performance.

As a result of these efforts, net sales rose 5.4% to ¥68,399 million while operating income rose 8.0% to ¥5,114 million, compared to the previous fiscal year. While further strengthening cost-cutting initiatives, we will also create new demand by expanding into growing markets and proposing new applications. Accordingly, the SATO Group will continue to strengthen sales activities aimed at future business expansion.


<Americas>

In the North American market, orders continued to be received from the transport sector and OEMs for food product management systems. Also, inquiries related to laser printers for the apparel industry increased, contributing to firm sales. In the South American market, meanwhile, the operating results of Achernar S.A. of Argentina are making a steady contribution to overall performance.

As a result of these efforts, net sales rose 25.9% to ¥9,248 million (a rise of 4.2%, however, excluding foreign currency effects), and operating income rose 24.9% to ¥432 million, compared to the previous fiscal year.


<Europe>

In Europe, the SATO Group steadily enhanced production systems and cultivated sales channels in each country for our sticker and label products, and implemented sales strategies aimed at improving profitability. We are steadily achieving successful outcomes with inquiries for mobile solutions for the retail sector in the U.K., business expansion with large apparel and transport companies, and RFID inquiries for a large apparel company in Germany. Furthermore, we realized operating profitability for the second half of the fiscal year for our Spanish operations, after streamlining our business format to a sales function and restarting sales activities in Madrid in July 2013, bringing about operating profitability for the fiscal year ended March 31, 2014 for Europe as a whole. We will continue working to secure further stable profitability through these operations.

As a result of these efforts, net sales rose 30.1% to ¥7,173 million (a rise of 4.6%, however, excluding foreign currency effects), and there was an operating income of ¥124 million, compared with an operating loss of ¥213 million in the previous fiscal year.


<Asia and Oceania>

Although the Asian market lacked momentum on account of the weakening economic growth of emerging countries, our operating results improved compared with the previous year as sales of our new target markets grew according to forecast. Specifically, the Chinese market began to pick up in the second quarter, while Indonesia and Vietnam started contributing more toward sales following the commencement of their operations in the second half of the previous fiscal year.
Our factories in Malaysia and Vietnam that manufacture mechatronic products also contributed to increasing profits in this segment due to not only increased electronic printer demand but also successful cost reductions achieved by improving the entire process from development to manufacturing.

Furthermore, in Australia, we acquired the business of Magellan Technology Pty Ltd, a company recognized for its unique RFID technology, and started operations in December 2013 at SATO Vicinity Pty Ltd, a newly established local subsidiary. Through the acquisition of this technology, which has a proven track record particularly in the healthcare market, the SATO Group is now the only one-stop group that can offer RFID chips and tags, RFID printers, and equipment including RFID readers, as well as traceability and other systems and maintenance services. Looking forward, the SATO Group will step up its sales of RFID solutions to other markets where we expect future demand, particularly the healthcare market.

As a result of these efforts, net sales rose 25.7% to ¥11,951 million (a rise of 6.6%, however, excluding foreign currency effects), and operating income rose 122.1% to ¥1,256 million, compared to the previous fiscal year.