On August 2, we announced our financial results for the first quarter of fiscal year 2021.

The first quarter of last fiscal year was greatly affected by the spread of the new coronavirus around the world, which led to a decline in demand and forced us to adjust our production.

Since this is a comparison of that period and the April-June period of the current fiscal year, sales and profits have increased (returned to profitability) in most areas.

Summary of FY 2021 1Q Financial Results

Net sales: 109.8 billion yen (+67.9% compared to the same period of the previous year)

Business profit: 2.7 billion yen (the same period of the previous year being a loss of 8.0 billion yen)

Net profit of the quarter attributable to owners of the parent company: 1.7 billion yen (the same period of the previous year being a loss of 7.4 billion yen)

First of all, I would like to extend my gratitude to all the employees for your flexible response to the increased and decreased production.

Thank you very much.

Even in the midst of this difficult situation, our business profit has increased compared to the same period in FY 2019 as well as that of FY 2020.

I think this is a sign that our efforts over the past few years to "transform into a solid management structure” is

gradually bearing fruit.

However, the future outlook is still uncertain.

Due to the shortage of semiconductors, automobile production is lower than originally planned and has not fully recovered when compared to FY 2019, the year before Corona Pandemic.

In addition, the cost of raw materials, such as steel and natural rubber, is rising, and this is affecting us globally, especially in the United States and China.

In other words, we still need to tackle our daily operations with a sense of urgency.

Under such an environment, the General Industrial Products Divisions have been continuing to do well.

As for hydraulic hoses, the demand is growing in Japan for export, in addition to strong demand in China.

Demand for products for printers and copiers in the Chemical and Plastic Products Business is recovering in line with the recovery in economic activity.

Also, the Industrial Products and Material Business unit has been steadily accumulating profits while keeping overhead costs low.

This time, the business profit of the Automotive Products divisions is 1.4 billion yen and the business profit of the General Industrial Products divisions is 1.3 billion yen.

I am very grateful that the General Industrial Products divisions have been working very well to cover the difficult situation for the Automotive divisions.

To our employees

There is no change from the May announcement, but let's review the outlook for the current fiscal year again.

Net sales: 445 billion yen

Business profit: 13.5 billion yen

Net profit of the current FY attributable to owners of the parent company: 3.5 billion yen

While quadrupling the first quarter figure will not necessarily become the full year figure, at the current pace, we will not able to achieve the business profit target.

Although the Automotive Products divisions are expected to recover their production volume in the future, the prospect is uncertain due to the shortage of semiconductors and soaring raw material costs.

Therefore, if there is a situation where your workload is reduced, please use the time to improve your work, such as being creative with Kaizen in mind.

In addition, please make sure to create a system that allows you to respond flexibly in case your workload expands.

I strongly believe that it is possible to increase profits by continuing efforts to "transform into a solid management structure.

On the other hand, please absolutely do not engage in service overtime, unreasonable work, or violate the 36 Agreements, as a matter of course, in the pursuit of profits.

Our group has defined "S.E.C.-Q. (Safety, Environment, Compliance - Quality)" as the basis of our business operations, and it is the basic premise of all our work.

Also, please keep the purpose of your work in mind.

As your daily work is broken down, you may be feeling it as just "work" or just "parts".

However, when you look at it as a whole, everything is meticulously connected to important work.

Both automotive products and general industrial products support society by becoming products that are indispensable to people's lives.

Our goal is to be "one of companies that contributes to safety, comfort and the environment for people, society, and the earth,".

With sincerity, I would like to ask for your further cooperation.

2021.08