Looking at 2022, global economic conditions remained uncertain. In addition to the effects of COVID-19, this uncertainty was due to a variety of factors including the accelerated pace of global inflation, soaring resource prices triggered by the prolonged Ukraine crisis, tight supply of components and parts such as semiconductors, and sharp fluctuations in foreign currency exchange rates. By geographic region, the U.S. economy exhibited a recovery trend on the back of steady consumer spending. In contrast, economic conditions throughout Europe were generally weak. In Asia, China’s economy remained firm despite significant restrictions on economic activities owing to the government’s decision to adopt a zero-corona policy. On the domestic front, Japan witnessed a modest economic recovery.
In each of the major markets in which the Star Micronics Group operates, demand for POS printers was strong especially in the U.S. At the same time, overseas demand for the Group’s mainstay machine tools remained generally high with firm demand also in Japan.
Under these circumstances, the Star Micronics Group reported net sales of ¥87,368 million for 2022, up 35.7% compared with the previous year. This was largely due to the substantial increase in sales of machine tools. From a profit perspective, operating income climbed 87.8%, to ¥13,925 million owing mainly to the substantial jump in sales. Net income attributable to owners of the parent amounted to ¥10,299 million, up 79.4% year on year.

Looking ahead, conditions throughout the global economy are expected to remain uncertain. In addition to ongoing concerns surrounding geopolitical risks where no end is in sight, including the crisis in Ukraine, there are anxieties toward the economic slowdown caused by inflation and trends in energy prices which continue to over at a high level. In Japan, the impact of volatile foreign currency exchange rates also continues to be a major cause for concern.

Under these circumstances, and in the context of the Company’s consolidated business performance for the coming year, sales in the mainstay Machine Tools Segment are forecast to decline. Despite expectations of an upswing in sales as order backlogs clear in Europe and the U.S., this forecast decline is due to concerns surrounding a downturn in capital investment demand triggered by the slowdown in economic conditions. In the Special Products Segment, sales are projected to stall in the U.S., but remain firm in the European market. Taking into account these and other factors including the impact of foreign currency exchange rates, sales in this segment are forecast to remain at the same level as the year under review.

Taking into account the aforementioned factors, we are projecting a downturn in consolidated results in the coming year. In specific terms, we expect a decrease in net sales of 9.0% compared with 2022, to ¥79,500 million. On a year-on-year basis, operating income is forecast to decline 24.6%, to ¥10,500 million and net income attributable to owners of the parent to also drop 21.3%, to ¥8,100 million.

Forecasts are based on the assumptions that the yen/U.S. dollar exchange rate will be ¥125 and the yen/Euro exchange rate will be ¥130.