Global Brother Investor Information Message on IR from the Management

Language

Stock QuoteLast update :December 2, 2016

Message on IR from the Management

Representative Director & President Toshikazu Koike

As for the world economy during this second-quarter consolidated cumulative period, the US economy remains on the path to recovery, as personal consumption has increased steadily while consumer confidence has grown due to the recovery of the environment surrounding employment and incomes, and as there have been indications of capital investment by businesses having hit a bottom.

In Europe, the concern over the future of the economy is increasing due to growing political uncertainty, despite the retrieval of manufacturing businesses owing to a weak euro and other factors. In China, the economy continues to slow down as exports to emerging nations decline and the increase of personal consumption drops. In Japan, though corporate activities and personal consumption are increasing steadily overall as the situation surrounding employment continues to improve, the prospect of the future of the economy remains uncertain due to a strong yen and growing concerns over the decline of the economy outside Japan.

Under such circumstances, the consolidated results of this second-quarter consolidated cumulative period indicate that the sales revenue was 310.27 billion yen, and decreased by 9.2% as compared to the same period last year. The communications and printing equipment business grew steadily on a global basis, mainly in the United States and China, and the acquisition of Domino Printing Sciences plc as a consolidated subsidiary (hereafter referred to as Domino) created a positive impact. However, due to the negative impact of Forex as the yen became strong and a sales decrease caused by an impact of the fact that large orders for IT related customers, which had been allocated by the machine tools business during the same period last year, have tapered off, the consolidated results show a significant sales decrease.

Profit increased significantly as a result of promoting group-wide initiatives in the Printing and Solutions Business, such as streamlining of sales promotion cost, and reduction of expenses and moderation of inventory level, despite the negative impact of Forex due to a strong yen and significant profit decline in the Machinery business stemming from the significant income decrease of machine tools. In addition, the fact that the expenses related to the acquisition of Domino's shares, which were allocated during the same quarter last year, became no longer needed and produced a positive impact. As a result, the business segment profit increased by 28.1% as compared to the same period last year and was 34.671 billion yen, and the operating income increased by 19.5% as compared to the same period last year and was 36.164 billion yen. Because of these factors, the quarterly profit attributable to the owners of the parent company increased by 27.9% as compared to the same period last year, and was 26.991 billion yen.

In FY2016, the first fiscal year of our new mid-term business strategy of CS B2018 with the theme of Transform for the Future, Brother will continue to take on challenges in implementation of the three reforms in "Business," "Operation," and "Talent" as a whole group.

We will appreciate your continuous support for all of the activities of the Brother Group.

Brother Industries, Ltd.
Representative Director & President

Toshikazu Koike

November, 2016