Review of the first half of the period

The Company proactively made proposals on products and services to pursue sustainable manufacturing mainly in the apparel and fashion industry under the medium-term management plan Ever Onward 2026.

For the first half of the period (fiscal year ending March 2025), the apparel and fashion industry faced extremely severe situations because of the growing tension in the Middle East, the global slowdown, and the effect of climate change, including a mild winter despite the anticipation for an active market.
Also, for the Company, in the flat knitting machine segment, there was weak capital investment in WHOLEGARMENT® flat knitting machines in the core market of China after the first quarter because of the slow recovery in domestic demand. In the Italian market, there was an economic slowdown and a decreasing appetite for capital investment in the whole apparel industry resulting from a mild winter last year. In Bangladesh, which is a knit production base for advanced countries, there was a situation where it was difficult for customers to operate business because of the confusion caused by the July political change that significantly affected the supply chain. Uncertainty about the timing of capital investments by customers forced us to postpone the large orders that we estimated for delivery after the second quarter.
As a result of the above, performance was lower than initially forecast as consolidated net sales amounted to￥14,771 million (down 22.9% YoY) with operating loss of￥1,938 million (operating income of￥367 million for the same period of the previous year), ordinary loss of ￥2,035 million (ordinary income of￥564 million for the same period of the previous year), and interim net loss attributable to owners of the parent of ￥2,124 million (interim net income attributable to owners of the parent of ￥368 million for the same period of the previous year).
The Company faced the above-mentioned severe external environment, but we proactively made proposals on products and services to pursue sustainable manufacturing mainly in the apparel and fashion industry under the new medium-term management plan Ever Onward 2026. Among others, APEXFiz®, a subscription service for software, was widely adopted in Western markets and was appreciated for its manufacturing cost and time efficiency by buyers of major apparel brands in United States and Europe. This increased adoption of the system in manufacturing plants, and a favorable cycle was created. The Company feels that a good response to the reform of the supply chain through digital transformation (DX) based on our Total Fashion System® is progressing well.

Prospect for the second half

The Company will further upgrade the flat knitting machines and design system, strengthen the promotion of automatic cutting machines, and expand markets other than in the apparel area.

The future of the global economy remains uncertain, but the Company will further strengthen its approach to markets to proactively create new business opportunities. Particularly in the core flat knitting machine segment, orders are expected to rebound as the expected political stability in Bangladesh increases the adoption of our machines. We will continuously engage in strong promotional activities mainly at exhibitions in countries around the world.
In the design system segment, the Company will focus on the market launch of the automatic cutting machine P-CAM® series. We will expand our share in a wider variety of markets by strengthening promotions aimed at the mass-market segment.
In design system, license contracts for APEXFiz® progresses steadily. Our design system makes it possible not only to make a design but also to convert the design into production data, and it has the unique strength of digital linkage between designers and plants. The Company is appreciated by major fashion brands, which contributes to an increase in productivity and brand value by using the technology. The technology is essential for the apparel and fashion industry where the introduction of DX is progressing, and so continuous large demand is expected in the market.
The apparel and fashion industry has become polarized into the extremely high-priced, high-end fashion and low-priced, fast-fashion markets. On the other hand, the used clothing market is rapidly expanding because of rising prices and increasing awareness of sustainability. The market is forecast to further grow.
The Company also contributes to the revitalization of the industry by supporting manufacturing of long-beloved, high quality, and storytelling products as the time is expected to come when new and used clothing compete in the same market.
The Company pursues reform of the supply chain in the apparel and fashion industry while expanding business in areas other than the apparel area. We engage in developing business opportunities in the areas of mobility, medical care, and furniture, thinking that our flat knitting technology has not yet been utilized in many industries and has large potential applications. Among flat knitting machines, the WHOLEGARMENT® flat knitting machines contribute to sustainable manufacturing. Therefore, we will initially promote the benefits and potential of flat knitting technology in the European markets with the expectation that sustainability-sensitive Europe is a key market for business growth.
After the second half, the Company will fully engage in the further evolution of the flat knitting machines and design system, strengthening the promotion of automatic cutting machines and expansion of markets in areas other than the apparel area. In addition, we will build the foundation for the next period by strengthening sales in the Bangladesh and Western markets and by promoting new capital investment.

To shareholders

The Company will further increase competitiveness in the global market and fully engage in achievement of sustainable corporate growth and better future.

The Company sincerely appreciates the exceptional and daily support from shareholders. Unfortunately, we have amended the interim dividend from the amount forecast at the beginning of the period to ￥5 per share because we suffered from an extremely severe business environment for the first half of the period. We will execute far-sighted product development and market expansion with maximum use of our strength and creativity in consideration of the situation as a business opportunity toward innovative changes in the apparel and fashion industry. Also in the second half, we will further increase our competitiveness in the global markets and fully engage in achievement of sustainable enterprise growth and a better future. We will continue to sincerely listen to the opinions of shareholders and work with with employees, and we would appreciate your continuous understanding and support.