Message from the President
To the Shareholders
Thank you very much for your continued support of Mori Seiki.
We are pleased to present the investors' information for the Mori Seiki Group.
Mori Seiki manufactures premier machine tools, and is expanding widely throughout the world. We take pride in the fact that our machine tools enable our customers to increase their production efficiency and improve their quality and accuracy.
Beginning in the fall of 2008, the world wide financial crisis has adversely affected our business results. Due to an unprecedented drop in demand, we have seen some months where the value of orders declined 80% from the same month the previous year. In this environment, our net sales for FY 2008 was 157.2 billion yen (down 22%), our operating income was 5.9 billion yen (down 81%) and our net loss was 2.2 billion yen. We are predicting that these poor economic conditions have bottomed out because we are gradually starting to see prospects for recovery as customers of all sizes and from all industries and regions are starting to consider their next investment in equipment. Because of this, we are looking ahead to the period when demand will be increasing by focusing on the development of new models and improving the skill levels of our employees. It is a very challenging year, but we are taking this opportunity to develop a stronger and leaner management base.
As a part of seizing opportunities to improve, we have entered into two new business ventures. First, we have commenced a business and capital collaboration with the German company GILDEMEISTER AG. With this collaboration two of the world's largest manufacturers are working together, to enhance our dominant presence in the machine tool industry. We can make mutual progress in streamlining our operations, including joint sales, purchasing, and development, with the aim being to supply good machines and service to the customers at a reasonable price.
We have also acquired a new subsidiary: BUG Inc., a software development company with many system engineers, which will be working with us on the development of software to be incorporated in Mori Seiki machines.
The Mori Seiki Group is making progress with the second medium-term management plan "PQR555", whose three-year period of implementation runs from FY 2008 to FY 2010. The basic policy of this plan is "to maintain stable growth in mature markets, maintain a growth path by expanding its share in emerging markets and to establish a global management system by pursuing high standards in human resources, quality, and risk management. Through these efforts, we are aiming to become "Global One".
The Mori Seiki Group is also increasing the corporate value for the benefit of the shareholders, who understand that machine tools are the representative industrial goods that support manufacturing throughout the world. With regard to distribution of profits, our position is that we are placing priority on strengthening the competitiveness in the market through investment in development, centering on the new products and new technology that will be the core competence, consolidation of our production equipment, and personnel development by comprehensively considering our future business plan, business results, and financial status. With regard to the retained earnings, we are putting them to practical use to strengthen our competitiveness in the market through investment in development centering on the new products and new technology that will be the core competence and consolidation of our production equipment.
Mori Seiki will continue to strive for growth in the future, and we look forward to earning your continued confidence and support.
