Yorozu : FY2023 Financial Results

Title: Yorozu Corporation's FY2023 Financial Results: Key Points from the President & COO's Note

Yorozu Corporation, a leading Japanese automotive parts manufacturer, announced its financial results for the fiscal year ended March 31, 2023. The following are some essential points from the President and COO's note, which provides further insights into the company's performance during this period.

1. Sales and Operating Income:

The consolidated net sales for FY2023 amounted to JPY 558.5 billion, representing a decrease of 11.7% compared to the previous fiscal year. Operating income, however, increased by 11.1% year-on-year to JPY 58.1 billion, thanks to improved operational efficiency and cost reduction efforts.

2. Operating Margin and Net Income:

The operating margin for FY2023 was 10.4%, up from 9.8% in the previous fiscal year, demonstrating the company's successful cost reduction initiatives. Net income for the year came in at JPY 46.5 billion, up by 15.5% compared to the previous fiscal year.

3. Automotive Business:

The automotive business segment, which accounts for the majority of Yorozu's revenue, saw sales decrease by 11.8% year-on-year to JPY 517.1 billion. Despite the sales decline, operating income for this segment increased by 11.6% to JPY 54.5 billion due to cost reduction efforts and improved operational efficiency.

4. Industrial Machinery Business:

The industrial machinery business segment reported sales of JPY 41.4 billion, a decrease of 11.1% compared to the previous fiscal year. Operating income for this segment remained flat at JPY 3.6 billion, as the company continued to face challenges in this business area.

5. Outlook for FY2024:

For the upcoming fiscal year, Yorozu expects consolidated net sales to decrease by around 5% compared to FY2023, primarily due to the ongoing semiconductor shortage affecting the automotive industry. The company aims to maintain its operating income at around JPY 58 billion, with a focus on cost reduction and operational efficiency improvements.

6. Capital Expenditures and Dividends:

Capital expenditures for FY2023 totaled JPY 18.8 billion, with investments primarily focused on automation and digitalization initiatives to enhance production efficiency and product quality. The company also announced a dividend payout ratio of 40% for FY2023, with a dividend payment of JPY 15 per share.

7. Strategic Initiatives:

Yorozu continues to focus on strategic initiatives such as expanding its product offerings in the electric vehicle (EV) market, collaborating with global automakers to develop lightweight and eco-friendly automotive components, and investing in digitalization and automation to improve operational efficiency and product quality.

In conclusion, despite facing challenges in both the automotive and industrial machinery businesses, Yorozu Corporation managed to achieve growth in operating income for FY2023 through cost reduction efforts and operational efficiency improvements. The company remains optimistic about its future prospects, particularly in the EV market, and aims to maintain its operating income at around JPY 58 billion in FY2024 while continuing to invest in strategic initiatives to enhance its competitiveness in the global automotive parts market.