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Established in 1950, Star Micronics Co., Ltd. possesses the strength of developing and manufacturing high-added value products based on its core technologies of small-scale precision processing and assembly, aiming for more than half a century to realize businesses that “generate the greatest impact from the least materials.” From early period, we have looked overseas for business opportunities and promoted growth strategies with an emphasis on profitability in the global niche markets since the company was established. Going forward, Star Micronics will leverage the strength it has built up to develop its businesses and further raise its corporate value.

Group’s performance in the fiscal year ended December 31, 2018.

取締役社長佐藤衛写真 Effective from the fiscal period under review (the 10-month period ended December 31, 2018), Star Micronics changed its account settlement date from the end of February to December 31. Despite this change, the Star Micronics Group reported net sales of ¥65,939 million. This was largely due to record high sales of machine tools. From a profit perspective, operating income came to ¥9,712 million. Net income attributable to owners of the parent amounted to ¥6,795 million after posting business restructuring expenses related to the Precision Products Segment.

There were concerns of a lull in demand at the beginning of the period compared with the previous fiscal year in which sales and profits grew substantially as a result of robust trends in the Machine Tools Segment. Despite these concerns, demand remained brisk with the Group reporting strong results including record high monthly orders of machine tools in March 2018. As far as production was concerned, although supply was tight in connection with the procurement of parts, the Group took positive steps to improve productivity and was successful in maintaining strong sales. Turning to its other businesses, demand for POS-related products was firm mainly in the European and U.S. markets in the Special Products Segment. While a portion of demand for non-wristwatch components including components for hard disk drives (HDDs) was sluggish, trends in demand for wristwatch components was robust in the Precision Products Segment.

To Our Shareholders

・Corporate Governance

Star Micronics transitioned to a company with an audit and supervisory committee in May 2016 in order to further strengthen the supervisory function of the Board of Directors and reinforce corporate governance. At the same time, steps were also taken to ensure that a majority, or four, of the seven-member Board of Directors was comprised of outside directors. Looking ahead, we will continue to clarify the supervisory and executive functions of management and work diligently to lift the pace at which we carry out our business strategies.

・Return of profits to shareholders

From a shareholders’ return perspective, Star Micronics’ basic policy is to target a total consolidated payout ratio of 50% or more, including the repurchase of own shares, while taking into consideration its consolidated dividend on equity (DOE). In the fiscal period under review, the Company repurchased its own shares at an acquisition cost of approximately ¥1.8 billion. All of shares that were repurchased were retired. Star Micronics set its annual dividend at ¥54 per share, up ¥2 per share compared with the previous fiscal year. On this basis, the Company has continued to increase its cash dividend for an eighth consecutive fiscal year, and as a result, secured a total payout ratio of 55.2% with DOE coming in at 4.1%.

Turning to the payment of dividends for the next fiscal year, Star Micronics is looking to pay an interim and period-end dividend of ¥28 per share for the fiscal year ending December 31, 2019. This will bring the annual dividend to ¥56 per share, a ¥2 per share increase compared with the fiscal period under review.

Moving forward, the Company will continue to target DOE of 4.5% or more and ROE of 12.0% or more, both of which are medium-term targets under its Medium-Term Management Plan. While maintaining its focus on actively reforming its business and management, Star Micronics will work in unison to enhance its corporate value.

March 2019

Representative Director, President and CEO Mamoru Sato