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Results announcement

“Molting” for Growth

A record-high profit for the first time in 13 years

Thanks to the contribution of new high value-added products, such as “Shoshu-Riki” Premium Aroma, “SHALDAN” series, and “Senjo-Riki” series, the net income for the year ended March 2018 (71st) was 133% of that for the previous term, marking a record high.

Fortifying a highly profitable structure by having one vector for the whole company

It is the result of cost reduction efforts of the R&D and the manufacturing departments that cost rate improved by 1.1 points despite rising raw material prices. The awareness of returns reduction has been spread out in all staff of sales department, and we succeeded in reducing them by 13% from the previous term. The fact that each division takes a lead and the R&D and the sales departments become one vector to improve the composition of sales of high-profit products has also led to the improvement of gross profit. When a leader changes his/her behavior, the awareness of everyone changes. As a result of setting numerical targets in each department and keeping on making progress, an “earning system” has been established.

Watering sown seeds

Until the current term, we have been sowing seeds for growth, but from now on, since the soil is ready, we will germinate the seeds and let them grow healthy until blooming. There are five following seeding beds. 【No.1 share of existing business】Mothproofing agents, Air care 【Domestic new field/new market】Nursing care “Yells,” Functional aroma “AROMA SAPURI,” “Clear Forest,” etc. 【Overseas business】Strategic area, Specific business 【Thermal care】Expanding the market by creating new thermal business 【Creating a structure for growth】Change in work styles, Diversity, Restructuring the production system, etc.

Good performance brings investment and returns

In Thailand, which is a strategic area of the overseas market, we launched a locally produced product “SHALDAN” Kawaii Plus that meets local needs after doing detailed marketing research repeatedly. As a result of using TV commercials overseas for the first time, the distribution to retail stores has been growing steadily. From now on, we will convey the case in Thailand to ASEAN and make overseas marketing investment more active. In addition, as one of the pillars of the medium-term business plan, we will rebuild the production structure for growth and actively promote capital investment. In 2017, we acquired 20,496 square meters of factory land in Tochigi City, and in February 2018 we began construction of the fourth plant in Japan (2 stories above ground and a total floor area of 8,339 square meters). At the plant, we will produce disposable pocket warmers for the time being, but in the future we plan to reorganize our domestic production system. The operation of the new factory is scheduled to be started in April 2019. As stated, we will promote ambitious investment in the medium and long term span, and as for our dividend policy, while standardizing a stable dividend with consideration of the long term corporate value improvement, the year-end dividend was increased to 18 yen, up by 5 yen as a measure of returns to shareholders due to the good performance. As a result, the annual dividend is 31 yen, an increase of 7 yen from the previous fiscal year.

The “future” is not on the extension line of the “present”

As we completed the first medium-term business plan “sales improvement phase” in the current fiscal year, from the year ending March 2019 we will start the second medium-term business plan “scale expansion phase.” The current fiscal year was a period of time when we found out that our current clothes would become frayed and torn if we aimed for the next stage. Now is the time to molt. We cannot fly in the pupa. The whole company will take off the old skin and change into stretchable clothes that tolerate the growth. We would appreciate your further support.

June 2018
Takako Suzuki
President and Chief Operating Officer