Please tell us about operating performance for the fiscal year ending December 2023?
In the fiscal year ending December 2023, the first year of our Medium-Term Management Plan 2025, overseas markets, particularly North America where infrastructure demand continues to be stable, saw strong sales for generators in industrial machinery. However, sales of outdoor power equipment (OPE) declined due to a post-COVID pullback in demand, unfavorable weather conditions during demand season, and the impact of rising interest rates. Domestically, sales in the industrial machinery sector were strong for generators, but delays in introducing new products led to a decrease in revenue. Sales of outdoor power equipment and agricultural machinery also decreased due to rising fertilizer and fuel prices, which dampened willingness to buy among agricultural workers. As a result, overall sales decreased compared to the previous year.
In terms of profit, continuous cost reductions, price revisions, lower ocean freight rates, and the depreciation of the yen contributed to record-high operating profit, ordinary profit, and net profit. Furthermore, we exceeded the 7% operating profit margin and 10% ROE targets set in our Medium-Term Management Plan 2025, achieving 9.4% and 11.0% respectively.
What is the progress on the Medium-Term Management Plan 2025?
For Yamabiko Group’s core overseas OPE business, we plan to ensure steady growth by expanding our product lineup of engine and battery-powered products with distinct characteristics to meet the needs of professional and general users in North America and Europe, where markets are expected to expand. In addition, we will also focus on exploring new markets and strengthening sales in the rapidly growing Asian markets, supported by increasing profits and green space-related expenditures due to economic growth.
In the industrial machinery business, our hybrid welding machine was awarded the 2023 Energy Conservation Grand Prize in December. We have also announced 19 models of biofuel-compatible generators and welding machines, promoting the development and sales of products that contribute to carbon neutrality. For our domestic agriculture and forestry business, we are steadily expanding our lineup of electric products with standardized batteries through collaboration with other manufacturers, and advancing the development and sales of workforce and labor reducing products like remote-controlled mowers.
Regarding new business creation, we are preparing to start pilot tests of a multi-hybrid system combining solar power generation, generators, and storage batteries this spring, aiming to contribute to sustainable, carbon-neutral urban development through commercialization of the power business. In the field of robotics, we have begun our rollout of robotic mowers equipped with RTK functionality in the European market and are working on the development of autonomous mowers, continuing to launch products that facilitate labor-saving in lawn and grass mowing.
As part of our ESG efforts, we established the TCFD Committee dedicated to climate change response to further strengthen our governance structure. Regarding investment in human capital, we are working on making use of diverse talent, talent development, and improving our workplace environment, with targets set to achieve over 9% of management positions filled by women and over 60% of men taking childcare leave by 2025. Additionally, the company received recognition for its efforts in employee health management and promotion, receiving Silver Certification as a Company of Excellent Health , along with a letter of appreciation from the Tokyo Metal Industry Health Insurance Association in December.
Finally, please tell us about shareholder's return.
We see returning profits to shareholders on a regular basis as one of our key management priorities, and in addition to continuing regular dividend payments based on historical performance, we are implementing comprehensive shareholder returns strategies that take into account the business environment, company performance, financial conditions, and stock market trends.
For this fiscal year, as announced on February 27, 2024, we implemented an annual dividend of 55 yen per share, an increase of three yen from the initial forecast. Also, we completed a share buyback in August 2023, and will carry out another buyback in March 2024, at a maximum limit of 600 million yen for 300,000 shares. We remain committed to exploring comprehensive strategies for shareholder returns.