Q: Please tell us about your aspirations as president.

Suzuki:
My name is Hitoshi Suzuki, and I assumed the post of President on April 1, 2021. I will take over the steering role of management from former president Yuki, and will do my best to further grow and develop the business.

Since joining the company in 1989, I have gained experience mainly as an engineer, and since 2006, as an executive officer, I have been involved in sales and marketing while promoting global business expansion, mainly in the automotive business. Most recently, as a project leader in growing fields such as the automotive PA25 area*, 5G, and robots, which will be the key to future growth, and has been formulating medium- to long-term management plans and promoting projects. Going forward, as a company that will continue to grow under the new management system, leveraging our 30-plus years of experience as engineers focused on the automotive field and our 10-plus years of experience in marketing analysis, we aim to become a “100-year company that creates customer value.” 

* PA25 areas: 5 applications: safety systems, powertrain systems, motors, infotainment, and motorcycles.

Q: Looking back on the FY2020, please give us an overview of the business situation.

Suzuki:
Although sales and profits decreased, sales recovered from the second quarter onwards and the effects of cost reductions resulted in results exceeding initial forecasts.

Sales were affected by the spread of COVID-19, and lower than the previous fiscal year, but showed a recovery after bottoming out in the first quarter. In terms of profits, in addition to the decrease in production, the Vietnam factory suspended operations for about a month due to lockdown, and the soaring prices of gold and copper caused profits to decline.

In the mainstay automotive market, the infotainment field* saw a significant drop in automotive sales, and the safety field also suffered from the suspension of production in Europe and the United States in the first quarter. On the other hand, in the powertrain field, demand for eco-friendly vehicles increased mainly in Europe and China.

In the consumer market, sales increased for game consoles and TVs due to stay-at-home demand. In the industrial market, demand for FA-related equipment increased against the backdrop of economic recovery in China, resulting in an increase in sales.

As a result, the consolidated results were 36,520 million yen in sales (down 7.8% year-on-year), 2,900 million yen in operating income (down 37.3% year-on-year), 2,970 million yen in ordinary income (down 36.4% year-on-year), Net income attributable to shareholders was 2,141 million yen (down 34.8% year on year). Despite the decrease in sales and profit, the recovery in sales from the second quarter and the effect of cost reductions greatly exceeded the forecast figures at the beginning of the term.

*In-vehicle information communication system that provides both information and entertainment.

Q: Please explain the revision of the medium-term management plan.

Suzuki:
Based on changes in the market, we have re-established performance targets for the next three years. We will solidify the foundation for realizing our long-term vision.

The Company has revised its medium-term management plan (FY2020 to FY2022), which was announced in August 2020, and has re-formulated the three-year plan period from the FY021. In our previous plan, we assumed a large negative impact from the COVID-19 pandemic, but in light of the fact that the market has changed since then and the business environment is showing signs of improvement, we have set a new performance target for the next three years.

Specifically, we have set targets for the FY2023 of consolidated sales of 52 billion yen and an operating profit margin of 20%. We aim to achieve it by taking it in. While maintaining the contents of the previous plan, the priority measures are "strategic segmentation + global reinforcement", "strengthening of the automotive market (PA25 area)", "early establishment of the second pillar", and "strengthening of technological development capabilities centered on Floating structure". We will promote the six items of "strengthening productivity, cost competitiveness and quality" and "strengthening management infrastructure".

Through this three-year plan, we will return to a growth trajectory and solidify our foothold to realize our long-term vision of achieving net sales of 100 billion yen.

Q: What is your outlook for the FY2021?

Suzuki:
We will strengthen our efforts to achieve sustainable growth.

In our business, we anticipate further growth in the powertrain field due to an increase in eco-friendly vehicles, as well as growth in the safety and infotainment fields. In the consumer market, demand for game consoles and TVs continues to be strong, while the industrial market is expected to remain flat.

In terms of profits, we expect to be able to recover fixed costs through increased capacity utilization, realize cost reduction effects through automation and streamlining, and absorb increases in transportation costs and rising raw material prices.

Based on the above assumptions, the consolidated results for the current fiscal year are net sales of 42.0 billion yen (up 15.0% year on year), operating income of 6.7 billion yen (up 131.0% year on year), ordinary income of 6.6 billion yen (up 122.2% year on year). We forecast net income attributable to owners of the parent of 4.8 billion yen (up 124.1% year on year).

Positioning this year as a stepping stone toward achieving the goals of the medium-term management plan, we plan to make preparations for the future in terms of both development and sales while working to recover sales and improve profit margins.

Please give a message to shareholders.

Suzuki:
Implemented a year-end dividend of 50 yen per share. We will continue to aim to expand profit returns by improving business performance.

Reflecting the fact that the consolidated results for the fiscal year exceeded expectations, the year-end dividend this time has been increased by 10 yen from the original plan to 50 yen per share (the same amount as in the previous fiscal year). The year-end dividend for the FY2021 is scheduled to be 60 yen. We will continue to maintain stable dividends based on a dividend payout ratio of 30% or more, and aim to expand profit returns by improving business performance.

We would like to ask our shareholders to look forward to the further development of our business and to continue to provide us with your long-term support.