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President's Message

I would like to begin by expressing my ongoing gratitude to all of you. We deeply appreciate your loyal support.

Earlier this year, Akebono Brake Industry and six of its subsidiaries filed a formal application for Specified Certified Dispute Resolution Proceedings ("Business Turnaround ADR Proceedings") under the Industrial Competitiveness Enhancement Act of Japan. Within the Business Turnaround ADR Proceedings, we are working with the relevant financial institutions as we formulate a business revitalization plan based on the examination, instruction, and advice of the Japanese Association of Turnaround Professionals. We aim to finalize this plan upon receiving the unanimous consent of the aforementioned financial institutions. I offer my sincerest apologies for the tremendous difficulty and concern this has caused. I bear the full weight of this responsibility and would next like to explain how our business reached this state.

Under our previous midterm business plan, "akebono New Frontier 30 - 2016," we set out three goals:

  • Rebuilding North American operations
  • Establishing global networks based on product-based business units
  • Expanding high performance brake business and recreating European operations

By achieving these goals, Akebono aimed to return to a sound financial condition.

However, we faced new issues regarding our North American business. These included the withdrawal of U.S. automakers from passenger car production and the loss of brake product orders for next-generation models due to past production issues. In addition, raw material prices rose sharply, mainly in Japan and North America. There were also delays in adjusting production and head office functions in response to the decrease in orders. As a result, the Group's consolidated net sales for the fiscal year ended March 31, 2019 came to ¥243.7 billion, down 8.0% year on year, and operating profit was ¥0.2 billion, down 97.4%. Furthermore, reflecting impairment losses in North America, Europe, and Thailand, Akebono recorded a loss attributable to owners of parent of ¥18.3 billion for the fiscal year (compared with ¥0.8 billion in profit attributable to owners of parent in the previous fiscal year). In light of these results, I regret to say that we do not plan to pay cash dividends for the fiscal year under review. In this regard as well, I would like to express my sincere apologies to our shareholders.

Under these circumstances, the entire Akebono Group is uniting to establish a business revitalization plan through the Business Turnaround ADR Proceedings in order to establish a strong profit structure and radically improve the Group's financial standing. We share the singular aim of returning to business growth.

I once again apologize to our shareholders. I sincerely ask for your understanding and support going forward.

June 2019Hisataka Nobumoto
Chairman, President & CEO
Akebono Brake Industry Co., Ltd.