In the Machine Tools Segment, sales of CNC automatic lathes jumped significantly amid brisk global demand for capital investment in 2022. By geographic region, sales were strong across a wide range of industries centered on the medical-related sector in the U.S. market. In the European market, sales were robust mainly in automotive-related industries. Accordingly, sales rose significantly in each market. Despite signs of a cautious approach toward capital investment in China over the latter half of the year, sales in the Asian market increased. This was mainly due to the ongoing high level of sales mainly in automotive-related industries. With signs of a recovery across a wide range of industries, sales in the domestic market increased substantially. This was despite the delay in an automotive-related recovery in Japan.

Accounting for these factors, net sales in the Machine Tools Segment climbed 42.3% compared with the previous year, to ¥69,409 million (US$521,872 thousand) while operating income jumped 78.6% year on year, to ¥12,249 million (US$92,098 thousand).

*1 The consolidated fiscal period for the fiscal period ended December 31, 2018 is based on and presented for a 10-month period for the Company and consolidated subsidiaries in Japan and a 12-month period for overseas consolidated subsidiaries.

*2 In conjunction with its decision to dissolve the Precision Products Division, Star Micronics Co., Ltd. took steps to revise the classification of its business segments in 2020. Effective from 2021, the Company reclassified the three Special Products, Machine Tools, and Precision Products segments into the two Special Products and Machine Tools segments. Meanwhile, turning to segment information in 2020, the amount included in the Precision Products Segment is now included in the Machine Tools Segment.

Sales in the mainstay Machine Tools Segment are forecast to decline in 2023. 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.

Looking ahead, Star Micronics will undertake the necessary preparations to commence operations at solution centers in Shanghai and Switzerland while working to expand production capacity by bolstering its three production bases. The Company will also strengthen its sales structure by enhancing before- and after-sales services in Japan, Europe, and Asia.

As far as business results are concerned, net sales in the Machine Tools Segment are forecast to decline 11.0% compared with the year under review, to ¥61,760 million. Operating income is anticipated to decrease 20.8% year on year, to ¥9,700 million.