President's Message

Message to our shareholders and investors

We would like to deeply thank all of our shareholders and investors for supporting the Amada Group.

■Business performance of the most recent period

Driven by the recovery trends in both domestic and overseas market demands, the consolidated interim sales results for the period ending in September 30, 2011 resulted in 92.2 billion yen order intake (up 17.6% year on year), and 85.8 billion yen in sales (up 14% year on year), both exceeding the figures of previous periods.

As for the revenue, we have made substantial profits in all figures despite the handicap with strong yen - 3.4 billion yen in operating profit (0.1 billion yen at pervious period), 2.9 billion yen in ordinary profit (up 338.8% year on year), and 1.3 billion yen in interim net profit (up 838.6% year on year) – resulting from increased revenue and higher gross profit rate with improved capacity utilization and a rise in retail prices.

■The economic environment surrounding Amada

The global economy has been continuing to show modest recovery led by the economic expansion of emerging countries such as China and India, but the recovery is clouded by the slowing U.S. economy and financial crisis in Europe during the second half of the period.

As for the domestic market, although we are recovering from the temporary economic recession from the Great East Japan Earthquake, the Japanese economy is still in severe conditions with unstable overseas economy and unprecedented strong yen.

As for the machinery industry, although the demands are increasing compared to the previous period, the economic volatility is forcing customers to take the cautious approach in facility investments particularly for the small and medium enterprises, and we have yet to see a full recovery.

Although we believe the economic trends will continue to show moderate recovery trends, there are negative risk factors such as the rapid strong yen in the currency market and financial problems in the European nations, and we expect it will increase our dependency on the economic growth driven by the emerging countries such as China.

■Resilience and recovery of the Group

Meanwhile, when we look at the global manufacturing environment, it is undergoing a significant change; production shifting to emerging countries, global environmental issues can no longer be dismissed, and products and technologies beyond our existing paradigm such as the electric vehicles assuming greater prominence.

The business environment is very difficult to navigate, but Amada regards this paradigm shift as an opportunity, and operate with the slogan “Resilience and recovery of the Group”.

As for our management plan, we have decided to postpone and review our numeric targets we have set in the Mid-term Management Plan for one year, based on the currency rate change, impact of the earthquake, and the results of our strategic investments.

For specific details and initiatives, please see “About the Mid-term management plan”.

■Co-existing with the global environment and our BCM activities

Amada established the “Amada Group Environmental Declaration” in April 2010.

With “eco-manufacturing” as the theme, Amada is committed to pursuing environmental activities where society and companies maintain sustainable growth. Following are the challenges we are facing today:

-	Developing products with less CO2 emission
-	Reducing the CO2 emission of all our business operations
-	Contributing to recycling-oriented society through efficient utilization of resources
-	Strengthening our initiatives for reducing the use of restricted chemical substances
-	Developing the “Amada forest” at Fujinomiya Works that realizes harmony of business activities and nature

Please see the Amada Group Environmental Declaration posted on our website.

We are also committed to the BCM (Business Continuity Management) initiatives that leverage the lessons learnt from the Great East Japan Earthquake.

Specifically, we will work on themes such as decentralization of production sites, diversification of procurement routes, streamlining of infrastructure, fundamental disaster prevention measures; and build a roadmap for continuing operations under adverse conditions to fulfill our social obligations.

■Dividends and capital policy

Amada is striving to reinforce the corporate foundation with the belief that the increase of corporate value is the best way of giving back to our shareholders. We regard distribution of results as one of the important management issues.

Our basic dividend policy is to distribute the results closely linking our performance, while considering stability and continuity; and dividend payout ratio is expected to be around 30% of the consolidated net profits.

During recession periods and other weak periods of business performance, we will determine the dividend amount by comprehensively assessing the funds and financial situations at that time as well as plans for future business investments.

For the interim dividend, although the consolidated net profit is still small, the Board has declared the interim dividend of ¥6 per share (dividend increase of ¥1) to respond to the shareholders support with the substantial increase in year on year revenue.

Considering an increase in profit, the expected year-end dividend is ¥6 per share (annual ¥12), an increase of ¥1.

Our recent dividends are as follows:

Fiscal year ending on March, 31	Dividends per share			Payout ratio
	Interim	Year-end	Annual	（consolidated）
	Yen	Yen	Yen	%
2009 (term before previous term)	11.00	5.00	16.00	72.3
2010 (previous term)	5.00	5.00	10.00	-
2011 (current term)	5.00	5.00	10.00	131.8
2012 (next term)	6.00	*6.00	*12.00	*70.5

* Plan (planned dividend is a forecast as of November 2011. The actual dividend may change significantly from the planned amount due to various factors)

Amada will strive to meet our shareholders/ investors' expectations, so we would like to ask for your continued support.