A Message from the Management
A Message from the Management
Thank you very much for your continued support.
Basic policies for profit distribution
We would like to begin by addressing the improper activities in
regards to fuel consumption and gas emission testing of the Com-
pany’s automobiles last year, which caused unfortunate worry
among our stakeholders. As a result of testing by the Ministry of
Land, Infrastructure, Transport and Tourism (MLIT), it was confirmed
that there were no problems with the Company’s original values for
fuel consumption (fuel consumption values listed in catalogues)
and original values for gas emission. The Company has taken swift
action to implement reliable measures for preventing recurrence
of the incident. All executives and employees of the Company will
continue to implement thorough compliance in order to maintain
trust and meet the expectations of shareholders.
Under the New Mid-Term Management Plan (from FY2015 to
FY2019) SUZUKI NEXT 100, the Company plans active investments
for future growth, which includes accumulated capital investment
of 1 trillion yen and research and development expenses of 200
billion yen for FY2019. At the moment, the Company prioritises in-
vestment for growth centred in India, and set the dividend payout
ratio target to 15% or more.
Also, partly because of large acquisition of treasury shares in the
previous fiscal year, shareholder’s equity ratio declined to 35.4% at
the end of the previous fiscal year, and the improvement of share-
holder’s equity ratio is becoming an urgent issue. Meanwhile, the
Company also recognises that capital efficiency and shareholder
return are significant management issue as well.
Taking the above-mentioned condition into consideration, as with
the previous fiscal year, the Company would utilise the gain on
sales of investment securities for investment for growth and im-
provement of shareholder’s equity ratio, and made the year-end
dividends based on the net income attributable to owners of the
parent excluding the gain on sales of investment securities, which
was ¥27.00 per share, up by ¥10.00 per share from the previous
fiscal year.
Management results of FY2016
With respect to the management environment of the Group for
FY2016, the economy is recovering moderately as a whole. On the
other hand, there are concerns about the influence of the policy
of US administration, uncertainties about trend of Europe including
the issue of the UK leaving the EU, prospects for the economy of
developing countries, and others. In India, an important market for
the Group, the economy is expanding mainly owing to increase of
domestic consumption. Also in Japan, the economy is recovering
moderately on the back of various measures introduced by the gov-
ernment.
As a result, the annual dividends including interim dividends was
¥44.00 per share and up by ¥12.00 per share from the previous
fiscal year. Dividend payout ratio based on the net income attrib-
utable to shareholders of the parent excluding the gain on sales
of investment securities is 15.2%.
Under these circumstances, the consolidated net sales of the fiscal
year (April 2016 to March 2017) decreased by ¥11.2 billion (0.3%) to
¥3,169.5 billion compared to the previous fiscal year. The Japanese
domestic net sales decreased by ¥10.4 billion (1.0%) to ¥1,037.5
billion year-on-year mainly owing to decrease in mini vehicle and
OEM sales, despite increase in compact vehicle sales. The overseas
net sales were flat on the year at ¥2,132.0 billion mainly owing to
decrease in automobile sales in Indonesia and Pakistan, and the
impact of the exchange rate, despite increase in automobile sales in
areas including India and Europe.
In terms of the consolidated income, although there were impact
of the exchange rate, the operating income increased by ¥71.4
billion (36.5%) to ¥266.7 billion year-on-year mainly owing to in-
crease in automobile sales in India and Europe. The net income at-
tributable to owners of the parent increased by ¥43.3 billion (37.1%)
to ¥160.0 billion year-on-year partly owing to increase in gain on
sales of investment securities, in addition to increase in the ordi-
nary income, despite accounting impairment loss of ¥39.9 billion
for businesses including the automobile business in Thailand as
extraordinary losses.
Outstanding issues
The Group has established the New Mid-Term Management Plan
SUZUKI NEXT 100 - Strengthening of its management base toward
the 100th anniversary of foundation and the next 100 years -, a
five-year plan from 2015.
FY2016 marked the second year of the New Mid-Term Manage-
ment Plan. The Company is making steady progress for achieving
the 2019 fiscal year goals of 3,700 billion yen and maintaining an
operating income margin of 7%.
Also, due to changes in the environment surrounding automobiles
and to increasingly severe market competition, it has become
necessary to focus on R&D for environmental performance and
safety, and on growth investment with a focus on India. Amidst
such conditions, the Company is addressing the following issues
in order to achieve the New Mid-Term Management Plan.
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SUZUKI MOTOR CORPORATION
