Issues to be Addressed
1. Medium-Term Business Plan
i. Outline of the Medium-Term Business Plan
Akebono announced the Medium-Term Business Plan (the "Plan") in "Announcement Regarding the Formulation of the Medium-Term Business Plan" disclosed on August 7, 2025.
Under the Plan, the three years from the fiscal year ended March 31, 2026 to the fiscal year ending March 31, 2028 (FY2025 to FY2027) were defined as a period to "Rebuild the Foundations." In order to become a company that can reliably generate profits regardless of changes in the external business environment, the plan sets targets to achieve operating profit of 8.0 billion yen, an operating margin of 6%, and free cash flow of 6.0 billion yen in FY2027, with a goal of returning all regions to profitability.
Furthermore, the next medium-term business plan covering the fiscal year ending March 31, 2029 to the fiscal year ending March 31, 2031 (FY2028 to FY2030) is positioned as a period to "Return to Growth," when Akebono will aim to achieve once more the Group's record-high operating profit of 15.2 billion yen recorded in FY2007 and sustainable growth beyond that. To realize these goals, in addition to expanding its business with a focus on high-profit businesses, Akebono will take on the challenge of new technologies, products, and markets and make the necessary preparations to do this during the current Plan.
As the foundation supporting these strategies, it is essential that Akebono continues to be a company that earns the trust of its stakeholders based on solid safety, quality, and compliance. Akebono believes that it can only build up the various measures that will serve as the pillars of the Plan after this foundation has been established.
The main measures under the current Plan are as follows.
The first is to "achieve profitability in each region, with a focus on achieving profitability in the U.S.," which has been an issue for some time.
The second is "reform of the cost structure," with a focus on automotive products in Japan.
The third is to "implement initiatives for immediate expansion of sales," with a focus on rolling stock products and aftermarket products.
In addition, we will work on "preparing for new technologies, products and markets for the next medium-term business plan."
ii. Progress of the Plan
In the consolidated fiscal year under review, the first year of the current plan, Akebono has been working with a sense of speed, putting a particular emphasis on measures to address "reform of the cost structure" and "implement initiatives for immediate expansion of sales." As a result, we achieved operating profit of 5.6 billion yen, an operating margin of 3.5%, and free cash flow of 2.4 billion yen, all of which exceeded the targets for the first year of the Plan, which were operating profit of 4.0 billion yen, an operating margin of 2.6%, and free cash flow of 0.9 billion yen.
In the second year of the Plan, we aim to achieve operating profit of 7.0 billion yen, an operating margin of 5.0%, and free cash flow of 4.0 billion yen through measures to address "achieve profitability in each region, with a focus on achieving profitability in the U.S."
2. Conformance to the Continued Listing Criteria
At the end of FY2024, Akebono's tradeable share ratio failed to conform to the continued listing criteria for the tradeable share ratio of the Tokyo Stock Exchange Prime Market (35% or higher). Ordinarily, companies are required to achieve conformity to the continued listing criteria within one year. However, Akebono has entered into an investment agreement with Japan Industrial Solutions Fund II ("JIS Fund") for the purpose of assistance with the business turnaround. In collaboration with JIS Fund, Akebono is currently working to improve its management structure to achieve the business plan (the "Business Plan for the Refinancing") formulated when it entered into a refinancing loan agreement of 32.0 billion yen. As a result, the Tokyo Stock Exchange has approved special rules with a plan period until the end of March 2030 to achieve conformity, and Akebono is working towards achieving conformity to the continued listing criteria for the tradeable share ratio during this plan period.
Akebono will enhance corporate value through the following initiatives in order to achieve conformity to the continued listing criteria.
i. Business operations aimed at enhancing corporate value
JIS Fund intends to work more closely integrated with Akebono on business operations and realize enhancement in corporate value that benefits all stakeholders. Akebono will also continue to further strengthen the collaboration and relationship of trust with JIS Fund.
ii. Implementation of the Business Plan for the Refinancing and the Medium-Term Business Plan
Under the monitoring of JIS Fund, Akebono is promoting measures aimed at achieving the Business Plan for the Refinancing. In addition, Akebono will continue to steadily execute the Medium-Term Business Plan formulated and announced in August 2025.
iii. Strengthening of investor relations activities
Akebono will encourage dialogue between investors and its management through the active involvement of top management in investor relations activities. In addition, Akebono will further enhance information disclosure through its investor relations website to improve corporate transparency information.
