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SMC expects stable growth in demand after revealing latest financial results

SMC expects stable growth in demand after revealing latest financial results

SMC, the world leader in pneumatic automation solutions with a global market share of 37% (up from 34% in 2015), has released its financial results for 2019 (ended March 2020). Highlighting a number of positives, including sales of ¥526 billion (approximately €4.35 billion), the results indicate that large number of customers continue turning to SMC for their pneumatic system requirements, boosting the automation levels of nearly every sector.

It is clear that the commercial world has been faced with a number of ongoing challenges over the past 12 months, not least the trade conflict between the US and China, the appreciation of yen over the rate seen in 2018 and, most recently, COVID-19. These factors contributed to a decline in orders across all geographic regions. As a consequence, net sales decreased by 8.8%, operating profit declined 18.8% and ordinary profit contracted by 20.1%.

Despite these difficulties, SMC remains a stable technology partner, bringing continuity of supply and service to any company looking for improvements in pneumatic system performance. Indeed, the results show that a number of industry sectors recorded an increase, including medical and electrical equipment, while the semiconductor market recovered from its recent downturn. Industries such as food and machine tools proved stable.

Investing for the future

With most countries now beyond the peak of COVID-19 infections, industry is commencing its journey to recovery. Looking to the future, SMC increased its investment in R&D by 20% in the 2019 financial year, to ¥38.3 billion (approximately €317 million, 7% of sales).

Over the past 12 months the company also added nine subsidiaries to its consolidated base of worldwide facilities, which together house a mix of 1,100 newly recruited and existing employees. These new subsidiaries not only signal SMC’s commitment to growth, but its increased capability to respond in the current rapidly evolving trading arena. The total number of people employed globally by the company today stands at 20,853.

Focused measures

SMC has set out many other focused measures for the current financial year (to March 2021), which include accelerating the establishment of further production bases and the reinforcement of sales activities. The company is also actively formulating contingency plans should there be any sudden challenges in material procurement, ensuring continuity for customers.

Moving forward, SMC is fully prepared in helping customers respond to the industry’s principal technology trends, including the IoT, smart factories, cloud computing and 5G. The company will also continue providing environmentally-friendly solutions that are both cost-effective and high in quality. Finally, even more investment is pledged for new product development, capital equipment, R&D and human resources, helping to drive further growth.

Foreign currency exchange rate applied: 1 Euro – ¥ 120.8 (average rate FY 19 – As per in Consolidated Financial figures published by the Corporation, May 19, 2020).

25.09.2020