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President's Message

Dear Shareholders,

I would like to begin by expressing my deepest gratitude to all of our shareholders for their continued support.

It's my pleasure to present this overview of the Akebono Group's business results during the 121st fiscal period (from April 1, 2016 to March 31, 2017).

Although our North American operations have recently been a source of significant anxiety to our shareholders, we are pleased to report that signs of recovery began to emerge during the period, reflecting our thoroughgoing efforts to resolve our production-related problems in the region. We will continue striving toward further improvement.

Looking at various management indices, consolidated net sales stood at ¥266.1 billion compared with net sales of ¥281.3 billion in the previous fiscal year. Overseas revenues grew on a local currency basis as we have received firm orders from North American and Chinese customers while building momentum in Europe as a supplier of brakes for high-performance commercial vehicles. However, overall sales were down due largely to the effect of yen appreciation. On the earnings front, backed by successful initiatives directed at streamlining domestic operations along with various restructuring measures positively affecting the North American business earlier than expected, operating income amounted to ¥4.2 billion. Consequently, profit attributable to owners of the parent was ¥0.4 billion.

In May 2016, we announced "akebono New Frontier 30 - 2016 (aNF30-2016)," a medium-term business plan ending in fiscal 2018. The plan is intended to reclaim our sound financial condition and secure sustainable growth and, to this end, is centered on three key initiatives: rebuilding North American operations; establishing a global network based on product-based business units; and expanding the high-performance brake business and recreating European operations. Having just completed the first year of this plan on March 31, 2017, we were able to record robust business results exceeding the plan's targets. However, it is my regret to announce that, due to such factors as the posting of a considerable loss in the previous fiscal year, we plan not to pay cash dividends for the fiscal year under review. I would express my sincere apologies to our shareholders in this regard.

Akebono is a small, specialized independent manufacturing company. This status allows us to swiftly make decisions, accumulate unique expertise in the areas of friction and vibration in the course of brake manufacturing, and expand into new business fields without facing any constraints. Drawing on these advantages, we will continue to rally Groupwide resources to achieve the goals of aNF30-2016 and enhance our corporate value.

We sincerely ask our shareholders for their continued support and encouragement.

May 2017Hisataka Nobumoto
President and CEO
Akebono Brake Industry Co., Ltd.