As for the global economy surrounding the TOYOBO Group (hereinafter referred to as the “Group”) in the nine months ended December 31, 2019, a sense of uncertainty has intensified and the economy slowed due to the trade friction between the United States and China, the situation in the Middle East, and the issue of the United Kingdom’s exit from the EU. In Japan, the economy was at a continuous standstill mainly due to the impact of stagnant exports with the global economic slowdown and consumption tax hike.

 

 Amid this operating environment, the Group has focused on “Films & Coatings,” “Mobility,” and “Healthcare & Wellness,” which were set as the growth field targets in the 2018 Medium-Term Management Plan. In the nine months ended December 31, 2019, in “Films & Coatings,” the Group steadily expanded the sales of polarizer protective films for LCDs “COSMOSHINE SRF” as a result of improved productivity. As for mold releasing film for MLCC “COSMOPEEL,” new processing equipment was put into operation and the Group proceeded with the increase in production capacity. The Group also acquired all stocks of two subsidiaries held by TEIJIN LIMITED as of October 1, 2019, and commenced integrated management aiming at further solidifying the foundation of the films business.

 Manufacturing facilities for airbag yarn and functional cushion material “BREATHAIR,” etc., were lost due to the fire accident in September 2018, but the new plant started up from September 2019, and manufacture and sales of “BREATHAIR” steadily resumed. As for airbag fabrics, the Group continues to conduct sales with procurement of replacement materials for airbag yarn.

 

 As a result, consolidated net sales in the nine months ended December 31, 2019 decreased ¥1.9 billion (0.8%) over the same period of the previous fiscal year, to ¥248.0 billion. Operating profit increased ¥0.6 billion (4.1%), to ¥16.0 billion, ordinary profit increased ¥0.8 billion (6.1%) to ¥13.4 billion, and profit attributable to owners of parent was ¥5.9 billion (Compared with loss attributable to owners of parent of ¥0.3 billion for the same period of the previous fiscal year.).

 

 The outlook for the business environment during the fiscal year ending March 31, 2020 is that a sense of uncertainty in the global economy arising from the trade friction between the United States and China, the situation in the Middle East, and the Chinese economy will continue to be a cause for concern and growth will slow. The effect of the overseas economic downturn is also still a concern for Japan.

 

 In view of the current business environment and while positioning the fulfillment of corporate social responsibility (CSR) as the foundation of our business, the Group will contribute to the resolution of social issues and increase its economic value, thereby raising its corporate value (CSV: Creating Shared Value). Also, the Group will aim to build a strong and “good TOYOBO Group” with growth potential and stable profitability.

 

 The performance of the TOYOBO Group in the nine months ended December 31, 2019 was generally as forecast. Regarding the forecast for the full fiscal year, no changes have been made in the outlook announced on November 7, 2019.

 

 The Company considers providing returns to shareholders to be one of its highest priorities. Its basic policy is to continually provide a stable dividend, in a comprehensive consideration of such factors as sustainable profit levels, retention of earnings for future investment, and improving the financial position to provide shareholders returns, including the acquisition of treasury shares, with a target total return ratio (*) of 30%. At this point, the Company plans to pay a year-end dividend for the fiscal year ending March 31, 2020 of \40 per share.

 

(*1)Total return ratio = (total dividend + total amount of share buybacks) ÷ profit attributable to owners of parent

 

 I would like to offer my most sincere appreciation to our shareholders and investors, and ask for your continued support.

 

 

February 2020