President Message

First Year of Rebirth

The Core Business is Healthy in the Rapidly changing Environment

In the fiscal year ended March 2022, sales decreased to 99.1% year on year* as the demand for gloves fell in step with the changes in the situation concerning the novel coronavirus, and the performance of dehumidifiers was sluggish due to lower precipitation during the rainy season. However, the core businesses of AIR Care, CLOTH Care, etc. performed healthily thanks to the growth of high value-added products. While the ratio of cost to sales improved owing to the reduction of manufacturing costs based on the in-house production of components for core products and the modification of the formulation of products, operating income decreased due to a rise in the costs for digital marketing such as social media, research, etc. Furthermore, the impairment loss in the THERMAL Care business was posted as extraordinary loss, resulting in a considerable decrease in net income.

*The Accounting Standard for Revenue Recognition (hereinafter referred to as the “New Standard”) has been applied since the fiscal year ended March 2022. The calculation is based on the assumption that the New Standard was applied in the previous fiscal year.

Reviewing our Strategy by seeing the impairment loss in the THERMAL Care Business

The performance of the THERMAL Care business deviated from the initial business plan as the sales of the existing disposable warmers stagnated due to the lasting tendency of warm winters and intensifying competition on the Japanese market, as well as the changes in overseas business operations impacted by the novel coronavirus and the delay in the development of new innovated THERMAL Care products. Unamortized goodwill and recoverable costs for production facilities were posted in extraordinary loss, following our accounting policy, which puts the maintenance of the sound financial position on the first place. From now on, we shall try to drastically revise the strategy for the THERMAL Care business.

Large-scale reform of the Organizational Structure

In the new financial year, we reshuffled executives and reformed the organizational structure significantly, to shift to an organization that sticks to the Customer First Policy. First, we newly established a New Business Development Section separated from existing departments to work toward the reinforcement of the capability to create a market for opening a future, while unifying the marketing strategies for Japan and overseas and restructuring them into a Global Marketing Division. Moreover, we newly set up a Corporate Value Enhancing Division for promoting sustainability management across divisions while reinforcing the governance and risk management system. Furthermore, we shall aim for sustainable growth and the creation of corporate value in the long term by newly setting up a Customer First Promotion Division and being born again as a “comprehensive marketing company,” with the whole company attending to customers in one vector.

Future Initiatives

In this fiscal year, we will engage in four basic strategies with the new system and build foundations for the following growth.

1. Drastic reform of the revenue structure of the existing businesses
Initiatives for the No. 1 position and global growth of AIR Care and meeting new demand in CLOTH Care

2. Concentration of resources onto growing areas
Review products with low revenues and reallocate resources to growing areas

3. Clarification of a business development system
New commercialization process by the New Business Development Section and development of marketing for creating a market

4. Formulation and disclosure of long-term ESG policy
Setting a long-term ESG strategy and strategic HR by the Corporate Value Enhancing Division

Thorough Cost Reduction to cope with the increase in prices of resources

As the increase in the prices of resources was spurred by the situation in Ukraine and the depreciation of the yen for the first time in 20 years, we are expecting the growth of 700 million yen in the raw material prices this fiscal year. However, we are projecting the improvement of the ratio of cost to sales by offsetting it with cost reduction based on in-house production and changes in the specifications of core products and components as well as a shift to high value-added products.

Outlook for the Fiscal year ending March 2023

While we are projecting a decrease in profit due to proactive investment for growth in this fiscal year (digital marketing expenses and the costs for surveys and research, an increase in the amount of investment in the development of human resources, etc., and depreciation expenses for a new core system), we are planning to increase the annual dividend to 40 yen/share. We would like to humbly ask for your further support.

June 2022
Takako Suzuki
Chairman of the Board, President & CEO