AKEBONO REPORT 2018

44/50

05050Review of Operations by RegionReview of Fiscal 2017Net sales came to JPY139.9 billion (8.7% year-on-year decrease), affected by decreased sales caused mainly by some U.S.-based automakers’ withdrawal from sedan models and tentative inventory adjustment in the aftermarket products market, although sales increased thanks to strong orders received for products for pickup trucks and SUVs and optimization of sales prices.Review of Operations by RegionReview of Fiscal 2017Net sales were JPY14.1 billion (22.1% year-on-year increase) on increased sales of disc brake calipers for mass-produced high performance vehicles, despite decreased sales in the aftermarket friction material business. 43 AKEBONO REPORT 2018Operating profit soared to JPY1.5 billion (operating loss of JPY3.2 billion for the last fiscal year) mainly due to one-time expenses such as external consultant fees were not incurred and expedited freight was significantly reduced through stabilized operations and labor costs reduction through reduced overtime and holiday work were achieved, despite the effects of decreased sales and rising steel and other material prices. As a result of various measures taken for the four Akebono posted an operating loss of JPY2.0 billion (compared to an operating loss of JPY1.3 billion in the last fiscal year) mainly due to various expenses incurred in the Slovakia Plant resulting from its efforts toward thestart of full-scale production, increased depreciation expenses associated with increased manufacturing lines, rising labor costs associated with the increased number of personnel, and delay in the planned rationalization, as well as a change in the product sales initiatives—(1) Fundamental organizational reforms, (2) Productivity improvement, (3) Increase of manufacturing capacity, and (4) Improvement of earnings structure, the Akebono Group successfully posted operating profit of JPY1.8 billion in the United States alone in fiscal 2017.mix resulting from declines in the friction material business in the Arras Plant in France, which is highly profitable.Outlook for Fiscal 2018Akebono expected net sales to be JPY114.5 billion (18.2% year-on-year decrease) and operating profit to be JPY0.0 billion (compared to operating profit of JPY1.5 billion in the last fiscal year) due to the impact of declining sales, despite improving labor costs and cost reductions activities.Outlook for Fiscal 2018An increase in sales is expected mainly due to higher sales of disc brake products for mass-produced high performance vehicles and the operating loss is expected to JPY0.9 billion due to the impact of an increase in sales and a reduction in scrap cost resulting from an improving yield rate. Akebono’s EURO® Ultra-Premium Ceramic Disc Brake Pads for the U.S. Market Received the Best Overall Import Aftermarket Product Award for the Third Time Slovakia Plant where full-scale production has startedNet sales(Billions of yen)Net sales(Billions of yen)200150122.81005020132014201520162017252015107.420132014201520162017166.9153.1139.9140.3114.5-5-10-152018Forecast19.1-1(0.6)14.110.911.68.9-2-32018Forecast20132014201520162017(FY)(FY)Operating profit/loss(Billions of yen)Operating profit/loss(Billions of yen)0(FY)(FY)1.50.70.0(3.2)(3.2)(11.2)201320142015201620172018Forecast(0.5)(0.9)(0.9)(1.3)(2.0)2018ForecastNorth AmericaEurope