Investor Relations

To Our Investors

In the first half of this year, the Japanese economy was gradually recovering, due to recovery demand after the Great East Japan Earthquake and other factors, but this economic recovery trend now seems to be faltering. Overseas, the pace of economic expansion in China has slowed and the economy is weakening in Europe due to concerns over the financial crisis in some countries. In the U.S., the economy has gradually recovered.
In the midst of such circumstances, the Shimadzu Group has been actively implementing growth measures in accordance with our medium-term management plan, such as introducing globally strategic products, strengthening the aftermarket business, and promoting local R&D and local production overseas. A new organizational structure was started that integrates the planning, R&D, manufacturing, and sales functions for major markets, namely North America, Europe, and China, under the control of respective divisions. An International Business Department was established with a mission of developing new markets and growth primarily in newly emerging economies. In addition, we focused efforts on ensuring business results in spite of a strong yen by expanding sales of new competitive products tailored to customer needs and other measures.

As a result, for the current first half, sales increased for the Analytical & Measuring Instruments and Medical Systems businesses, decreased for the Aircraft Equipment business, due to lower demand in Japan, and decreased for the Industrial Machinery business, due to stagnating semiconductor and LCD markets. Consequently, overall sales decreased slightly to 124,589 million yen (a year-on-year decrease of 0.6%). In terms of profit and loss, the persistently strong yen, increased expenses due to aggressive business deployment, such as for R&D costs, and other factors, operating income was 4,657 million yen (36.3% decrease), ordinary income was 4,192 million yen (33.9% decrease), and interim net income was 2,597 million yen (21.1% increase).

We paid a midterm dividend of 4.5 yen per share for this fiscal year.

Due to an entrenched strong yen, European financial crises now projected to extend into the long-term, deteriorating business conditions resulting from the current relations between Japan and China, and so on, market conditions in the current outlook are predicted to remain very difficult.
Given these circumstances, the Shimadzu Group will focus efforts on the stronger North American and Southeast Asian markets and on public sector demand in Japan, which is expected to grow toward the end of the fiscal year.
In addition, we have continued to build our global business capabilities and strengthen our overseas sales capabilities according to our medium-term management plan. Based on the above, we will increase market share and achieve business results by introducing and expanding sales of new highly competitive products, especially globally strategic products, and supplying applications, services, and other solutions that provide convenience and high added value to customers and increase customer satisfaction levels. Also, we will expand our aftermarket business, which is expected to provide a stable source of profit, so that we can establish an operating structure that ensures profitability under even difficult business conditions. Furthermore, we will engage in measures to reduce costs for the entire Group, such as implementing efficient cost controls and operations, strengthening overseas manufacturing operations, and expanding overseas local procurement functions.
The Shimadzu Group will continue to grow and expand our businesses toward achieving our long-term vision "Toward Becoming a True Global Business" by remaining diligently committed to steadily implementing the policies specified in the medium-term management plan.
We are grateful to all our shareholders for their ongoing support. Thank you.

December 2012
Akira Nakamoto
President & Chief Executive Officer