Management Policy

During the first two quarters of the current fiscal year (April 1 – September 30, 2011), the global economy continued to expand moderately thanks to growth in emerging markets, especially in Asia. Meanwhile, the economic outlook in Europe and the U.S. became increasingly uncertain due mainly to the financial crisis in Europe.

Although there was a steady recovery from the economic downturn caused by the Great East Japan Earthquake, the Japanese economy was still gripped by uncertainty due to restrictions on power usage, the continued appreciation of the yen, and the sluggish European and U.S. economies.

Under these circumstances, the Group strived to expand its businesses by focusing on the non-Japan industrial automation and control market, particularly in emerging nations where fast growth is driving expansion of the energy sector. In Japan, it sought to minimize disruptions to operations following the March 11 disaster and provided products and services to customers who were working hard to restore their operations.

As a result, in the first two quarters of the current fiscal year, the Group's net sales and operating income were both up year on year, coming to 157.8 billion yen and 6.8 billion yen, respectively. Net income totaled 0.7 billion yen, up 4.2 billion yen over the same period of the previous fiscal year. This overall improvement can be attributed to a restructuring of our businesses in fiscal years (FY) 2009 and 2010 that involved the reduction of fixed costs and a review of our business portfolio.

As our consolidated results for the first two quarters of the current fiscal year exceeded the forecast announced on August 9, the Group has revised this forecast and now projects a 1 billion yen increase in orders, a 3 billion yen increase in net sales, a 2 billion yen increase in operating income, and a 1 billion yen increase in net income. On a consolidated basis, we aim to achieve 356 billion yen in orders, 336 billion yen in net sales, 15 billion yen in operating income, and 6 billion yen in net income.

On November 9, 2011, we announced the Evolution 2015 mid-term business plan in which we have defined our management targets for FY2015 along with the growth and structural reform strategies needed to achieve those targets. The plan is the first step to achieving our long-term vision of becoming the global No. 1 company in the industrial automation and control business. At the Yokogawa Group, our aim with Evolution 2015 is to improve our corporate value and meet the expectations of our investors. I ask for your continued support.

December 2011

Shuzo Kaihori
President and Chief Executive Officer